2016 (7) TMI 871 - SC - Central Excise

Review petition against the order 2015 (9) TMI 356 - SUPREME COURT - Clandestine manufacturing and removal of goods - dummy job work units - fictitious invoices showing much lower quantities/value than the actual - Held that - On the aforesaid basis, normal order could have been to remand the case back to the Commissioner. However, immediately after the afore quoted portion, this Court did not do so only on the ground that the tax effect was minimal. In this review petition, the review petitioner/assessee has successfully demonstrated that the tax effect is not minimal. In fact, it is in the neighbourhood of ₹ 27 lacs and with interest and penalty the amount may be much large. Having regard to the above, we allow this review petition to the limited extent by substituting the last two paragraphs of the order with the following paragraph The appeals are allowed except that only for the limited purpose of deducting the job work got done from outside parties from total clearances and for redetermining the liabilities on that basis, the matter is remanded back to the Commissioner of Central Excise, Rajkot. This exercise may be completed within a period of six months after affording proper opportunity to the respondent. The review petition is disposed of in the aforestated terms.

Summary

Issues: Review of judgment regarding tax liability, remand to Commissioner for redetermination of liabilities based on job work done by outside parties.

In the judgment dated 23.07.2015, the Supreme Court accepted the contention of the review petitioner/assessee regarding the lack of evidence to prove allegations against the respondents. The Tribunal's decision to set aside the Commissioner's order was deemed erroneous as the Commissioner had included the value of job work done by outside firms in the calculation of payable amount. The Court acknowledged that the tax effect was not minimal, amounting to approximately ?27 lakhs, and allowed the review petition based on this revelation. Consequently, the Court decided to remand the case back to the Commissioner for redetermination of liabilities by deducting the job work done by outside parties from total clearances. The Court directed the Commissioner of Central Excise, Rajkot, to complete this exercise within six months after providing a proper opportunity to the respondent. The review petition was disposed of accordingly, with the last two paragraphs of the original order being substituted with the new directive for remand and redetermination of liabilities.