2016 (8) TMI 290 - AT - Central Excise

Whether the cross-objections filed by the assessee before Commissioner (Appeals) can be considered to be an appeal or not - Held that - by following the decision of Hon ble Karnataka High Court in the case of Southern Auto Products Vs. Commissioner of Central Excise, Bangalore-I 2007 (11) TMI 363 - KARNATAKA HIGH COURT , the cross-objections filed by the assessee before Commissioner (Appeals) are required to be disposed of as an appeal filed by the assessee. Therefore, the impugned order is set aside. - Matter remanded back

Summary

Issues:
1. Consideration of cross-objections filed by the assessee before Commissioner (Appeals) as an appeal.

Analysis:
The judgment involved a case where the Original Adjudicating Authority confirmed a duty demand, interest, and penalty on the assessee. The Revenue challenged the order before the Commissioner (Appeals) seeking an increase in the penalty amount. Simultaneously, the assessee filed cross-objections against the order. The Commissioner (Appeals) rejected the Revenue's appeal, citing the discretion of the Adjudicating Authority to impose a lesser penalty. Regarding the cross-objections, the Commissioner (Appeals) refused to consider them as an appeal since the assessee did not file a separate appeal against the duty demand. The main issue before the Tribunal was whether the cross-objections filed by the assessee should be treated as an appeal or not.

The Tribunal analyzed Section 35E of the Central Excise Act, which deals with the powers of the Revenue to file an appeal against the Adjudicating Authority's order. The Tribunal referred to sub-section 4 of Section 35E, which states that applications by the Revenue should be treated as appeals. Additionally, the Tribunal examined Section 35B (4), which allows a party to file cross-objections against an order appealed against, even if they did not file a separate appeal initially. The Tribunal concluded that cross-objections must be considered as an appeal by the assessee, as per the provisions of the law.

The Tribunal noted a previous decision where it was held that an assessee cannot file cross-objections if they did not appeal against the relevant part of the original order. However, the Tribunal found that this decision did not adequately address why the specific provisions of Section 35B (4) were not considered. The Tribunal also referred to other cases where it was established that cross-objections should be treated as appeals to prevent the defeat of the purpose of allowing cross-objections. Citing a decision by the Karnataka High Court, the Tribunal ruled that cross-objections filed by the assessee should be disposed of as an appeal filed by the assessee. Consequently, the Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) for a fresh decision on both the Revenue's appeal and the assessee's cross-objections, treating the cross-objections as an appeal.

In conclusion, the judgment clarified the treatment of cross-objections filed by the assessee before the Commissioner (Appeals) and established that such cross-objections should be considered as appeals, following the relevant provisions of the Central Excise Act and previous legal precedents.