2011 (7) TMI 260 - HC - Central Excise

Waiver of predeposit - During the course of the conversion, waste and scrap was generated which was retained by the Appellant and cleared on the payment of duty - it would be appropriate in the interests of justice to remand the proceedings back to the Tribunal for reconsideration - As a matter of fact the Division Bench held that both the High Courts of Madras as well as this Court would have territorial jurisdiction and it was open to a suitor to select a forum which was normally the case when the cause of action fell within the territorial jurisdiction of two Courts - In this view of the matter and without expressing any opinion on the merits of the question as to whether a prima facie case has been made out, we set aside the impugned order of the Tribunal and remand the proceedings for a fresh determination - Appeal is disposed of

Summary

Issues:
1. Whether the Appellate Tribunal was justified in directing the Appellant to deposit a specific amount under Section 35F of the Act?
2. Whether the Appellate Tribunal was justified in holding that the Appellants did not make out a prima facie case for total waiver of duty, interest, and penalty?

Analysis:

Issue 1:
The Appellant challenged the order of the Customs, Excise and Service Tax Appellate Tribunal, which directed the Appellant to deposit a specific amount under Section 35F of the Act. The Commissioner of Central Excise, Nagpur confirmed a duty demand on the Appellant along with interest and penalty. The dispute arose from the Appellant's conversion of raw materials into finished products, where the Department alleged suppression of facts regarding the sale of scrap generated during the process. The Tribunal, while considering the application for waiver of pre-deposit, acknowledged the conflicting decisions on the inclusion of scrap value in assessable goods but directed the Appellant to pre-deposit an amount. The Appellant argued that a complete waiver should have been granted based on relevant judgments. The High Court, after considering jurisdictional objections, decided to remand the proceedings back to the Tribunal for re-consideration, emphasizing the need to assess the impact of pertinent judgments.

Issue 2:
Regarding the question of whether the Appellants made out a prima facie case for a total waiver of duty, interest, and penalty, the Tribunal's decision was contested. The Appellant argued that the Tribunal did not adequately consider the impact of relevant judgments, including one cited before it. The Appellant pointed to a specific Tribunal decision that had taken a final view on the subject, advocating for a complete waiver. On the other hand, the Revenue contended that the Tribunal's decision was consistent with the law and did not require reconsideration. The High Court, while addressing the merits, decided to remand the proceedings for a fresh determination, emphasizing the need to consider the impact of relevant judgments that could affect the issue at hand. As a result, the High Court disposed of the Appeal without costs, refraining from answering the framed questions of law due to the remand of proceedings.

This detailed analysis of the judgment highlights the key issues, arguments presented, relevant legal principles, and the High Court's decision to remand the case for further consideration by the Tribunal.