2009 (11) TMI 740 - AT - Central Excise

Summary

Issues:
Appeal against denial of Cenvat credit on paints, primer, white lead, and red lead. Doctrine of merger applicability in appeal before Commissioner (Appeals).

Analysis:
1. The appeal before the Appellate Tribunal CESTAT NEW DELHI involved a dispute regarding the denial of Cenvat credit on paints, primer, white lead, and red lead. The original authority allowed credit on paints and primer but disallowed credit on white lead and red lead. The Commissioner (Appeals) rejected the appeal by the party against the disallowance of credit on white lead and red lead.

2. The Department filed an appeal against the original authority's decision to allow credit on paints and primer. The Commissioner (Appeals) held that since he had already passed an order on the appeal by the party, the doctrine of merger applied, and he could not consider the Department's appeal separately.

3. The Appellate Tribunal considered the arguments presented by both sides. The Department contended that there were two distinct issues - eligibility of credit on paints and primer, and eligibility of credit on white lead and red lead. They relied on a Supreme Court decision to support their position that there was no merger of orders.

4. The Advocate for the party argued that the Commissioner (Appeals) did not decide the appeal on merits, and the original authority's order favored them by allowing credit on paints and primer.

5. After careful consideration, the Appellate Tribunal held that the issue in the Department's appeal before the Commissioner (Appeals) was different from the issue in the party's appeal. Therefore, the doctrine of merger did not apply. The Tribunal set aside the Commissioner (Appeals)'s order and remanded the matter for fresh consideration, emphasizing that both sides should be given a reasonable opportunity to present their case.

6. In conclusion, the appeal was allowed by way of remand, directing the Commissioner (Appeals) to reconsider the eligibility of Cenvat credit on paints and primer in the Department's appeal, ensuring a fair hearing for both parties.