2004 (11) TMI 10 - HC - Central Excise

It is not open to tribunal to permit the assessee to reopen the matter (relating to dutiability of goods) once again when order of Comm.(A) 9holidng it dutiable) had attained the finality Hence revenue s appeal is maintainable & is allowed Order passed by tribunal is set aside

Issues Involved:
1. Dutiability of bought-out items.
2. Finality of the Commissioner (Appeals) order dated 22.3.2000.
3. Applicability of the Supreme Court decision in Hindustan Lever Ltd.
4. Entitlement to MODVAT Credit on bought-out items.
5. Maintainability of the appeal before the High Court.

Issue-wise Detailed Analysis:

1. Dutiability of Bought-out Items:
The core issue revolves around whether bought-out items used in the assembly of plant and equipment are dutiable. The Assistant Commissioner confirmed the demand for excise duty on these items, which was upheld by the Commissioner (Appeals). The Commissioner (Appeals) held that the assembly and erection of plant machinery at the site with bought-out items amount to the manufacture of a distinct new commercial article, thus chargeable to duty under the Central Excise Act and Rules. This decision was based on precedents from the Tribunal and the Supreme Court.

2. Finality of the Commissioner (Appeals) Order Dated 22.3.2000:
The respondent did not challenge the Commissioner (Appeals) order dated 22.3.2000, which had become final. The High Court emphasized that once an order attains finality, it cannot be reopened or re-agitated in subsequent proceedings. The Tribunal erred in allowing the respondent to question the dutiability of bought-out items in the appeal arising out of the consequential order quantifying the demand. The High Court cited the Supreme Court's decisions in Food Specialities Ltd. and Flock (India) Pvt. Ltd., which held that if an order is not appealed, it becomes final and cannot be questioned later.

3. Applicability of the Supreme Court Decision in Hindustan Lever Ltd.:
The Tribunal relied on the Supreme Court's decision in Hindustan Lever Ltd., which allowed re-agitation of issues in certain circumstances. However, the High Court distinguished the present case, noting that the respondent had not re-agitated the issue before the original authority post-remand. The High Court concluded that the principle from Hindustan Lever Ltd. does not apply here since the respondent did not challenge the finality of the Commissioner (Appeals) order.

4. Entitlement to MODVAT Credit on Bought-out Items:
The respondent contended that they were entitled to MODVAT Credit on the duty paid on bought-out items, which would reduce their liability. The Commissioner (Appeals) rejected this contention on procedural grounds, and the High Court did not delve into this issue further, focusing instead on the finality of the dutiability decision.

5. Maintainability of the Appeal Before the High Court:
The respondent raised a preliminary objection regarding the maintainability of the appeal, arguing that it involved the determination of the rate of duty or the value of goods, which should be appealed to the Supreme Court. The High Court rejected this objection, clarifying that the appeal was confined to whether the respondent could re-agitate the dutiability issue before the Tribunal. The appeal did not involve questions of the rate of duty or valuation for assessment purposes, making it maintainable before the High Court.

Conclusion:
The High Court allowed the appeal, setting aside the Tribunal's order. It held that the Tribunal erred in permitting the respondent to reopen the issue of dutiability of bought-out items, which had attained finality with the Commissioner (Appeals) order dated 22.3.2000. The High Court did not address the substantive question of whether bought-out items are dutiable, focusing instead on the procedural finality of the earlier order.

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