2014 (10) TMI 830 - HC - Central Excise

Demand of differential duty - Valuation u/s 10A - Held that - Respondent in the impugned order proceeded to refer to the order in original dated 3-9-2010 and the order in original dated 29-2-2012. The order in original dated 3-9-2013 is now the subject matter of appeal before the CESTAT and the CESTAT by order dated 31-7-2012, has granted waiver of the requirement of pre-deposit and stayed the collection of duty during the pendency of the appeal. In so far as the order in original dated 29-12-2012 is concerned, that order has been reversed by an order in appeal dated 30-1-2013 and that was pointed out by the petitioner in his reply dated 3-4-2013 furnishing a copy. The first respondent after referring to the two orders, passed the impugned order, when the first respondent ought not have placed reliance, since on such order has been stayed by the CESTAT and the other order has been reversed by the Commissioner (Appeals) and proceeded to confirm the demand. The manner in which the impugned order has been passed by the first respondent, cannot be appreciated. It is admitted by the respondents that as against the order in appeal dated 30-1-2013, the Department has preferred an appeal to the CESTAT and the same is now pending before the Tribunal. In such circumstances, this Court is of the view that the impugned order has been passed on account of sheer non-application of mind and based on irrelevant consideration, without reference to the orders passed by the superior authorities viz. the order passed by the Commissioner (Appeals) as well as the CESTAT. - Decided in favour of assessee.

Summary

Issues:
Challenge to Order-in-Original, Maintainability of Writ Petition, Error Apparent on Record

Analysis:
The petitioner filed a Writ Petition seeking to quash Order-in-Original No. 20/2014 dated 10-3-2014. The respondents contended that the petitioner should have preferred an appeal before the Commissioner (Appeals) within sixty days. However, the Court found that the impugned order had errors and lacked proper consideration. The petitioner, a manufacturer of Step Fan Regulator and T.V. Co-axial Socket Outlet, received a show cause notice for not adopting the assessable value correctly, leading to short payment of Excise Duty. The petitioner's reply highlighted favorable orders from the Commissioner (Appeals) on similar issues. Despite this, the first respondent proceeded with the impugned order, disregarding the earlier favorable decisions.

In paragraph 9 of the impugned order, it was acknowledged that previous orders favored the petitioner. However, in paragraph 15.0, the first respondent referred to other orders that were either stayed by the CESTAT or reversed by the Commissioner (Appeals). The Court criticized the first respondent for not considering the superior authorities' decisions and passing the impugned order without proper analysis. The Court noted that the impugned order was based on irrelevant considerations and lacked the necessary application of mind.

Consequently, the Court allowed the Writ Petition, quashed the impugned order, and remanded the matter to the respondents for a fresh hearing. The Court directed the first respondent to pass reasoned orders on merits, considering all observations and in accordance with the law. The Court emphasized that the petitioner should not be forced to file an appeal given the circumstances. No costs were awarded, and the connected Miscellaneous Petition was closed.