2012 (5) TMI 408 - AT - Central Excise

Review Order - Appeal filed against order of Commissioner dropping proceedings Held that - As per Section 35E of the Act, the Committee of Chief Commissioner are required to examine the legality and propriety of any such decision or order passed by the Commissioner, whereas in present case Chief Commissioners have differed on the issue of acceptance or filing appeal against the Commissioner s order. Therefore, Review Order is not in accordance with the provisions of Section 35E of the Act. The appeal filed by the Revenue is not maintainable and the same is dismissed.

Summary

Issues Involved: Appeal against dropping of proceedings based on Review Order not signed by all Chief Commissioners as required by Section 35E of the Central Excise Act, 1962.

Analysis:
1. Review Order Validity: The appeal was filed against the dropping of proceedings initiated by a Show-Cause Notice. The respondent argued that the Review Order was not valid as only one Chief Commissioner signed it, contrary to the requirements of Section 35E. The Department contended that the defect was curable. The Tribunal found that the Committee of Chief Commissioners must examine the legality and propriety of decisions or orders. The Review Order in question was not signed by all Chief Commissioners because they disagreed on whether to accept or appeal the Commissioner's order.

2. Classification of Goods: The Tribunal examined the nature of the goods involved, which were odoriferous compounds used in the manufacture of chewing tobacco. These compounds were considered excisable goods under Chapter 24 of the Central Excise Tariff Act, 1985. The Tribunal also noted that certain exemptions for captive consumption did not apply to these goods before a specific amendment in 2000.

3. Legal Precedent: The Tribunal referenced a Supreme Court judgment regarding the excisability and dutiability of similar goods. The Chief Commissioner directed the Commissioner to apply to the CESTAT for a correct determination based on the Supreme Court's decision. The Review Order failed to consider this legal precedent, leading to the dismissal of the appeal by the Revenue.

In conclusion, the Tribunal found that the Review Order did not comply with the requirements of Section 35E, rendering the appeal by the Revenue not maintainable. As a result, the appeal was dismissed, and the original dropping of proceedings based on the Show-Cause Notice stood.