2013 (6) TMI 179 - HC - Central Excise

Appeal before CESTAT against the order passed by the Chief Commissioner u/s 9A of Central Excise Act, 1944 - compounding the offence - held that - The Adjudicating Authority has been defined in Section 2(a) - The words any order or decision under the Act used in Section 2(a) of the Central Excise Act, 1944, defining the term, Adjudicating authority , must take in its fold an order deciding the lis of a party and would not include merely an administrative order. In the present case, however, the Commissioner s order does decide the question of compoundability of an offence of the applicant concerned and would therefore, in our view, satisfy the description of any order or decision passed by him under this Act. Appeal against any such order would lie before the Tribunal in terms of Clause (a) of sub-section (1) of Section 35B of the Central Excise Act. The Tribunal thus, was justified in entertaining such an appeal. - Decided against the revenue.

Summary

Issues:
1. Whether the Customs, Excise and Service Tax Appellate Tribunal was right in entertaining an appeal against an order passed under Section 9A of the Central Excise Act, 1944, where there is no provision under Section 35B to appeal against such an order?
2. Whether the order passed by the Chief Commissioner under Section 9A can be treated as an adjudication order under Section 35A of the Central Excise Act?
3. Whether the Tribunal was correct in treating the Chief Commissioner's order under Section 9A at par with the orders passed by the Board that are appealed before the Tribunal?

Analysis:
1. The respondent, engaged in manufacturing sanitary wares, faced show-cause notices and a personal penalty issue. The Chief Commissioner rejected the compounding application of the respondent, leading to an appeal before the Tribunal under Section 35B. The Tribunal partially allowed the appeal, remanding the case to the Commissioner for a fresh decision, which the Department challenged.

2. The argument presented was that the appeal before the Tribunal was not maintainable under Section 35B as the Commissioner's order was administrative, not an order by the adjudicating authority. However, the Court examined Section 9A of the Act, which allows compounding of offenses by the Chief Commissioner, indicating that such orders fall under the Act and are appealable.

3. The Court delved into the statutory scheme for compounding offenses under Section 9A and the Central Excise (Compounding of Offences) Rules, 2005. It concluded that the Commissioner's order rejecting the compounding application was an order under the Act, satisfying the definition of an adjudicating authority. Therefore, an appeal against such an order lies before the Tribunal under Section 35B(a).

4. The Court emphasized that the Commissioner's order decided the compoundability of the offense, making it an order under the Act. The Tribunal's decision to remand the case for fresh consideration by the Commissioner was deemed justified. Ultimately, the Court dismissed the Tax Appeal, finding no grounds for interference in the case.