2012 (4) TMI 202 - AT - Central Excise

Appeal of the department against the order of the Commissioner (Appeals) - original authority had confirmed the demand of duty against the respondent by clubbing their clearances of furniture items with similar clearances made by two other units and denying SSI benefit - the respondent submitted that the appeals filed by the department were found to be defective by reason of no show-cause notice having been issued to the other two units - Held that - the learned Commissioner (Appeals) did not record a speaking order on the issue agitated before him - chose to make a reference to an order passed by his Chennai counterpart - This kind of orders cannot be upheld as it is incumbent on the appellate authority to discuss the issue and record its decision - allow this appeal by way of remand to the Commissioner (Appeals) with a request to pass a speaking order

Summary

Issues:
Appeal against order demanding duty and penalty - Clubbing clearances with other units - Denial of SSI benefit - Non-speaking order by Commissioner (Appeals) - Appeal for remand to pass a speaking order.

Analysis:
The case involves an appeal by the department against an order of the Commissioner of Central Excise (Appeals) that set aside the demand for duty and penalty on the respondent. The original authority had confirmed the duty demand by clubbing the respondent's clearances with two other units and denying them the Small Scale Industry (SSI) benefit. The Commissioner (Appeals) set aside the order based on the independence of the three units, as discussed in a similar case by the Commissioner of Central Excise (Appeals) in Chennai.

The appeal by the Revenue challenges the order of the Commissioner (Appeals). The counsel for the respondent highlighted that similar appeals regarding the Hyderabad unit were dismissed previously, pointing out that no show-cause notices were issued to the other two units whose clearances were clubbed with the respondent's. The Tribunal noted the lack of a speaking order by the Commissioner (Appeals), which merely referenced the Chennai counterpart's decision without providing detailed reasoning. The Tribunal found this non-speaking order inadequate and set it aside.

Consequently, the Tribunal allowed the appeal by way of remand to the Commissioner (Appeals), instructing to pass a speaking order on the substantive issue with proper reasoning and adherence to legal principles and natural justice. The respondent was granted the opportunity to present relevant case law before the lower appellate authority. The decision was pronounced in open court at the conclusion of the hearing.