2010 (9) TMI 610 - HC - Central Excise

Appeal before Tribunal - Whether, the withdrawal of an appeal against a provisional determination of capacity of the Appellant by the Commissioner, Central Excise & Customs would be a bar for the appellant to file an appeal against the final determination of capacity - The Tribunal dismissed the appeal on the ground that when the Commissioner has approved the annual capacity finally, they cannot challenge the same annual capacity determined by the Commissioner, Central Excise and the appeal has been accordingly dismissed - The appellant s appeal was directed against the final order of the Commissioner and as such, the same gave fresh cause of action to the appellant herein to prefer appeal before Tribunal under Section 35(C) and therefore,the same cannot be dismissed summarily on the ground that the appellant s earlier appeal against the provisional order of the Commissioner, Central Excise was dismissed as withdrawn - Hence, set aside the impugned order.

Issues:
- Appeal against provisional determination of capacity
- Withdrawal of appeal and its impact on filing appeal against final determination

Analysis:
1. The appeal before the Chhattisgarh High Court revolved around the question of whether withdrawing an appeal against the provisional determination of capacity of Hot Rolling Mills by the Commissioner, Central Excise & Customs would bar the appellant from filing an appeal against the final determination of capacity of the same rolling mills.

2. The appellant initially opted for assessment under Rule 96ZP(3) of the Compounded Levy Scheme and the Commissioner passed a provisional order for the period 1999-2000, determining the capacity of the Hot Rolling Mills under the applicable rules. The appellant then appealed against this provisional order with a delay but later withdrew the appeal, leading to its dismissal.

3. Subsequently, the Commissioner, Customs & Central Excise, issued an order on 23rd May 2003, determining the annual capacity of production based on the rules. The appellant again appealed against this order, which was dismissed by the Tribunal on the grounds that a previous appeal against a different order had been withdrawn.

4. The High Court, after considering the arguments from both parties and examining the orders in question, found that the appellant's appeal against the final order of the Commissioner provided a fresh cause of action to file an appeal before the Tribunal under Section 35(C) of the Central Excise Act, 1944. The Court held that the dismissal of the earlier appeal against the provisional order should not bar the appellant from challenging the final determination of capacity.

5. Consequently, the High Court allowed the appeal filed by the appellant, set aside the impugned order, and remanded the matter to the Customs Excise and Service Tax Appellate Tribunal, New Delhi for a fresh adjudication on merits. This decision was based on the interpretation that the final order by the Commissioner created a new basis for appeal, distinct from the earlier withdrawn appeal against the provisional order.

6. The judgment underscores the importance of distinguishing between appeals against provisional and final orders, ensuring that parties are not unduly restricted in challenging final determinations due to earlier procedural actions regarding provisional orders. The High Court's decision aimed to uphold the appellant's right to seek redress against the final determination of capacity, notwithstanding the withdrawal of an appeal against a provisional order, emphasizing the need for a fair and comprehensive adjudication process in excise matters.

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