2010 (7) TMI 1120 - HC - Central Excise

Summary

Issues:
Challenge to order of Customs, Excise and Service Tax Appellate Tribunal - Allegations of incorrect duty payment under ACP scheme - Interpretation of relevant facts and rules - Remittance of the case to the Tribunal for re-hearing.

Analysis:
The appellant challenged the order of the Customs, Excise and Service Tax Appellate Tribunal, Eastern Zone Bench, Kolkata, which allowed the appeal of the respondent-assessee, setting aside the order of the Commissioner, Central Excise, Patna. The notice of demand-cum-show cause highlighted that the assessee was involved in the manufacture of excisable goods under specific chapters, necessitating duty payment based on the Annual Capacity of Production (ACP). The dispute arose regarding the duty payment for products other than non-alloy steel ingots and billets, which were deemed incidental and covered under the ACP scheme. The appellant contended that the Tribunal failed to consider the findings of the Commissioner and merely relied on settled law to absolve the assessee from duty payment under Section 3 of the Central Excise Act.

The respondent-assessee argued that the notice contained incorrect allegations and emphasized that the products covered under the compounded levy scheme predominantly outweighed other items. The High Court observed that the Tribunal's order lacked a discussion on relevant facts and failed to provide reasons for differing from the Commissioner's findings. It was noted that the Tribunal based its decision solely on settled law without adequately addressing the appellant's contention that the assessee's claim should not have been accepted considering the Explanation provided under Rule 2 of the Rules. An essential factual issue arose regarding whether the other products manufactured were incidental items or regularly produced goods falling under specific headings.

Consequently, the High Court set aside the order under appeal and remitted the case to the Tribunal for re-hearing. The Tribunal was instructed to reconsider the relevant issues on their merits without being influenced by any factual observations in the High Court's order. The appeal was allowed, with no order as to costs.