2011 (3) TMI 341 - HC - Central Excise

Reducing the duty liability from Rs. 11,77,971/- to Rs. 8,50,079/- Whether the CESTAT was justified in reducing the duty liability from Rs. 11,77,971/- to Rs. 8,50,079/- on the ground that the liability cannot be increased in remand proceedings when the increased demand is already covered by the show cause notice - The argument of the Revenue that when the order-in-original dated 21-10-1997 was set aside and the matter was remanded back, the adjudicating officer was entitled to confirm the demand even in excess of Rs. 8,50,079/- cannot be accepted because, the remand was restricted to the confirmation of the duty liability amounting to Rs. 8,50,079/- Since the Revenue had not challenged the decision of the adjudicating authority dated 21-10-1997 in dropping the demand in excess of Rs. 8,50,079/-, it is not open to the Revenue to adjudicate on that amount in the remand proceedings - Decided against the revenue.

Summary

Issues:
1. Interpretation of duty liability reduction by CESTAT in remand proceedings.

Analysis:
The appeal before the High Court raised the issue of whether the CESTAT was justified in reducing the duty liability from Rs. 11,77,971 to Rs. 8,50,079 on the basis that the liability could not be increased in remand proceedings when the increased demand was already covered by the show cause notice. The case originated from an order-in-original by the Assistant Commissioner of Central Excise confirming duty liability at Rs. 8,50,079, although the show cause notice demanded Rs. 11,77,971. The Revenue did not appeal the original order, but the assessee challenged it. The Commissioner of Central Excise remanded the matter back to the adjudicating authority, who then confirmed the duty liability at Rs. 11,77,971. The CESTAT, in its order, held that the remand was limited to the duty amount of Rs. 8,50,079, and thus the assessing officer was not justified in confirming a demand exceeding that amount.

The High Court noted that since the Revenue did not appeal the original order confirming the duty at Rs. 8,50,079, the remand was specifically for that amount only. The Court rejected the Revenue's argument that the adjudicating officer could confirm a demand exceeding Rs. 8,50,079 after the remand, as the remand was restricted to the confirmed duty liability amount. Therefore, the Revenue could not adjudicate on the amount exceeding Rs. 8,50,079 in the remand proceedings. Consequently, the High Court upheld the CESTAT's decision, finding no fault with it, and dismissed the appeal.