2014 (6) TMI 485 - AT - Central Excise

Duty demand - claim of benefit of exemption Notification No.2/95-CE in a case of clandestine removal - Commissioner followed previous decisions and decided in favour of assessee - appellate Commissioner concluded that the as the quantity alleged to have been clandestinely cleared was adjusted by the appellant /assessee under their DTA entitlement as supported by RT-3 return, the assessee was entitled to concessional Duty under Notification No.8/97-CE dated 1.3.97 and the order of the adjudicating authority demanding in excess of the same was set aside. Held that - judgment of this Tribunal in appeals preferred by M/s Euro Cotspin Ltd. and another, reported in 2000 (12) TMI 122 - CEGAT, COURT NO. I, NEW DELHI which is the sole basis for the order of the appellate Commissioner has become inoperative and stood eclipsed. Since this judgment is the only basis for the order of the appellate Commissioner, the impugned order cannot be sustained and is accordingly quashed. The matter is now remanded for fresh consideration on by the Commissioner (Appeals), Central Excise, Jaipur II and shall be disposed of expeditiously - Decided in favour of Revenue.

Summary

Issues:
1. Appeal against order dated 9.7.2001 passed by the Commissioner (Appeals), Customs and Central Excise, Jaipur II.
2. Recovery of duty on yarn removed without payment under Section 11A(2) of Central Excise Act, 1944.
3. Imposition of penalties under various sections and rules.
4. Benefit of exemption Notification No.2/95-CE in case of clandestine removal.
5. Reduction of penalty after granting benefit of Notification No.8/97-CE.
6. Dismissal of Excise Appeal Nos.2904 and 2905/1999.
7. Supreme Court judgment remitting the matter for fresh consideration.
8. Inoperativeness of the judgment in appeals preferred by M/s Euro Cotspin Ltd.
9. Remand for fresh consideration by the Commissioner (Appeals), Central Excise, Jaipur II.

Analysis:
1. The appeal was filed against the order dated 9.7.2001 by the Commissioner (Appeals), Customs and Central Excise, Jaipur II, concerning the recovery of duty on 1300.5 kgs. of yarn removed without payment under Section 11A(2) of the Central Excise Act, 1944. Penalties were imposed under various sections and rules, including Section 11AC of the Act and Rule 209A of the Central Excise Act, 1944.

2. The appellate Commissioner partially allowed the appeal based on the judgment of the Tribunal in M/s Euro Cotspin Ltd.'s case, granting the benefit of exemption Notification No.2/95-CE even in cases of clandestine removal. The appellant was found entitled to concessional duty under Notification No.8/97-CE, leading to a reduction in the duty liability demanded. The penalty under Section 11AC of the Act was also reduced to Rs.23,305, equivalent to the excise duty payable on the yarn as per the show cause notice.

3. The dismissal of Excise Appeal Nos.2904 and 2905/1999, involving M/s Euro Cotspin Ltd. and Shri J.C. Khandelwal, was separately addressed. The Tribunal's judgment in those appeals was appealed before the Supreme Court, which set aside the Tribunal's decision and remitted the matter for fresh consideration. As there was no representation on behalf of M/s Euro Cotspin Ltd., the appeals were dismissed.

4. Due to the Supreme Court's decision, the judgment relied upon by the appellate Commissioner became inoperative, leading to the quashing of the impugned order. The matter was remanded for fresh consideration by the Commissioner (Appeals), Central Excise, Jaipur II, to be handled promptly and in compliance with the law, resulting in the allowance of the appeal and the issue being remitted for fresh appellate consideration.