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2011 (2) TMI 1304 - HC - Central ExciseWhether on the facts and in the circumstances of the case the Customs, Excise and Service Tax Appellate Tribunal was justified in only partly following the decision in the case of Bhuwalka Steel Industries Ltd. v. CCE, Chennai 2005 (2) TMI 590 - CESTAT, CHENNAI by allowing the appeal and setting aside the duty demand? Held that - The question is answered accordingly. On the facts and in the circumstances of the case the Customs, Excise and Service Tax Appellate Tribunal was not justified in only partly following the decision in the case of Bhuwalka Steel Industries Ltd. v. CCE, Chennai supra by allowing the appeal and setting aside the duty demand without assigning any reasons for not adopting the course of action adopted in the said decision. The impugned order dated 9-4-2009 passed by the Tribunal is quashed and set aside. Central Excise Appeal is restored to the file of the Tribunal. The Tribunal shall decide the same afresh in accordance with law after affording the parties an opportunity of hearing.
Issues:
1. Compliance with relevant provisions regarding fixation of Annual Production Capacity (APC). 2. Validity of duty demand based on APC fixed by the Commissioner and communicated by the Assistant Commissioner. 3. Justification of the Tribunal's decision in allowing the appeal instead of remanding the matter back to the Commissioner for duty recovery. Issue 1: Compliance with Relevant Provisions Regarding Fixation of Annual Production Capacity (APC): The appellant, Commissioner of Central Excise, challenged the Tribunal's order regarding the APC fixation communicated by the Assistant Commissioner. The respondent, engaged in manufacturing, contended that the APC was not fixed legally, leading to duty demand and penalty imposition. The Commissioner confirmed the duty demand, which was partially modified by the Commissioner (Appeals). The Tribunal, following the Bhuwalka Steel Industries Ltd. case, set aside the Commissioner (Appeals) order and allowed the appeal. Issue 2: Validity of Duty Demand Based on APC Fixed by the Commissioner: The Tribunal, as per the Bhuwalka Steel Industries Ltd. case, emphasized that APC determination by the Commissioner and communication by a subordinate officer is not legally valid for duty demand. The Tribunal directed the Commissioner to determine the APC and quantify the duty demand after considering payments made by the party. In the present case, the Tribunal set aside the order but did not remand for APC determination, leading the High Court to quash the Tribunal's decision and remit the matter for fresh consideration. Issue 3: Justification of Tribunal's Decision in Allowing the Appeal: The High Court found the Tribunal unjustified in only partially following the Bhuwalka Steel Industries Ltd. case without providing reasons for not remanding the matter for APC determination. The Court allowed the appeal, quashed the Tribunal's order, and directed the Tribunal to decide the case afresh in accordance with the law. The Court clarified that it did not express any opinion on the merits of the Bhuwalka Steel Industries Ltd. case. This detailed analysis of the judgment highlights the key issues of compliance with APC fixation provisions, validity of duty demand based on APC, and the justification of the Tribunal's decision, providing a comprehensive understanding of the legal intricacies involved in the case.
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