2012 (11) TMI 958 - HC - Central Excise

Demand and penalty - gutkha - additional evidence before tribunal - revenue submitted that, it is well settled in law in terms of Section 32L of the Act that material placed before the Settlement Commission and an admission made by an assessee who could have the jurisdiction of the Settlement Commission can very well be used in any proceeding against the assessee under the Act and therefore when the very basis of the order for adjudication was such admission made by the very assessee before the Settlement Commission, it is not open to the assessee to go back on the same as it binds the assessee. - Alternatively, it is submitted that conduct of the assessee also does not behold acceptance as such material is sought to be placed more than three years after the event, that it was sought to be placed for the first time only before the Tribunal though proceeding was before the adjudicating authority and the appellate authority for more than three years etc. Tribunal has such power and jurisdiction and even assuming that it could have itself admitted the additional evidence and could have disposed of the appeal, but if the Tribunal thought it was proper for the adjudicating authority to examine the material, it is an order reserving full freedom for the adjudicating authority and therefore we are of the opinion that it does not call for interference in an appeal under Section 35G of the Act which can only be on a question of law erroneously decided by the Tribunal - Decided against the revenue. Held that -

Summary

Issues:
1. Appeal against order passed by Customs, Excise & Service Tax Appellate Tribunal.
2. Determination of duty liability on goods manufactured.
3. Rejection of application by Settlement Commission.
4. Admissibility of additional evidence before Tribunal.
5. Jurisdiction of Tribunal in admitting additional evidence.
6. Remand of matter to adjudicating authority for examination of additional evidence.

Analysis:
1. The appeal was filed against the order passed by the Customs, Excise & Service Tax Appellate Tribunal, which set aside the adjudication order determining duty liability on the assessee for the clearance of manufactured goods without payment of duty. The Tribunal remanded the matter to the original authority for further examination based on additional evidence sought to be placed by the assessee.

2. The assessee had initially sought the powers of the Settlement Commission by admitting to illegal removal of goods and offering to pay duty. However, the Settlement Commission rejected the application, leading to the adjudicating authority passing an order-in-original based on the admission made by the assessee before the Tribunal regarding the evasion of duty.

3. The Tribunal allowed the assessee to produce additional material indicating that the goods were not clandestinely removed but after payment of duty. The Tribunal set aside the order-in-original, directing the original authority to examine the materials presented by the assessee and to pass fresh orders.

4. The Revenue argued that the admission made by the assessee before the Settlement Commission could be used in any proceeding against the assessee under the Act. They contended that the material sought to be placed before the Tribunal was untimely and should not be accepted.

5. The Tribunal did not make a definitive ruling on the quality or admissibility of the additional evidence but decided that it should be examined by the adjudicating authority. The Tribunal's decision was based on the nature of the claim and material presented by the assessee.

6. The High Court upheld the Tribunal's decision, stating that unless the Tribunal's order is lacking jurisdiction or is tainted by illegality, interference is not warranted in matters that are remanded. The Court dismissed the appeals, affirming the Tribunal's authority to remand the matter for further examination of the additional evidence by the adjudicating authority.