2015 (10) TMI 1199 - AT - Central Excise

Duty demand - Undervaluation of goods - Held that - there is no indication that the earlier OIA was challenged by the Revenue. It is also noticed that CBEC vide Circular F.No.390/Misc./163/2010-JC dt.17.08.2011 held that Revenue would not file appeal below 5 lakhs before the Tribunal. Hon ble High Court of Karnataka in the case of Commissioner of C.Ex. Bangalore-III Vs Presscom Products - 2011 (3) TMI 726 - KARNATAKA HIGH COURT observed that the said circular would be applicable retrospectively. Hence this appeal filed by the Revenue is liable to be rejected on both the counts. - Decided against Revenue.

Summary

Issues:
Allegation of undervaluation of goods based on Panchnama, challenge to the Adjudication order, applicability of Circular F.No.390/Misc./163/2010-JC, retrospective application of circular, rejection of appeal by Revenue.

Analysis:
The case involved a dispute regarding undervaluation of goods, specifically Texurised Yarn, leading to a Show Cause Notice proposing a duty demand along with interest and penalties against the Respondent and the Authorised Signatory. The Adjudicating authority confirmed the duty demand, interest, and penalties. However, the Commissioner (Appeals) set aside the Adjudication order, prompting the Revenue to file an appeal. The key issue revolved around the allegation of undervaluation based on a Panchnama. The Commissioner (Appeals) had earlier allowed appeals related to similar proceedings initiated on the same Panchnama, citing lack of corroborative evidence and deviation from the Panchnama and statements. As the facts, basis of allegation, evidences, and submissions were identical to the earlier appeals, the Commissioner (Appeals) applied the same findings mutatis mutandis to the present case, ultimately setting aside the demand of duty, interest, and penalty for the present appellants as well.

The grounds of appeal by the Revenue did not challenge the earlier Order-in-Appeal (OIA), and it was noted that a circular by CBEC specified that Revenue would not file appeals below a certain threshold before the Tribunal. Citing a judgment by the Hon'ble High Court of Karnataka, it was observed that the circular would have retrospective application. Therefore, the appeal filed by the Revenue was found liable to be rejected on the grounds of failure to challenge the earlier OIA and the applicability of the circular.

In conclusion, after considering the arguments and perusing the records, the Tribunal found no reason to interfere with the Commissioner (Appeals) order. Consequently, the appeal filed by the Revenue was rejected. The judgment highlighted the importance of challenging relevant orders and the retrospective application of circulars in determining the admissibility of appeals before the Tribunal.