2008 (3) TMI 314 - HC - Central Excise

When the order dropping the demand of duty proposed in the show cause notice against M/s. ACPL has become final, the Department cannot have any genuine grievance against the dropping of the penalty proposed, which is consequential to the violation alleged against M/s. ACPL and cannot be legally sustainable

Summary

Issues Involved:
1. Validity of CESTAT's decision to entertain applications under established law
2. Correctness of applying a previous Tribunal decision to the current case
3. Dismissal of appeal by CESTAT without delving into case merits

Issue 1: Validity of CESTAT's decision to entertain applications under established law
The case involved M/s. Arihant Micro Computers (AMPL) supplying goods to M/s. Arihant Computers (ACPL) and undervaluing them. The Department issued a show cause notice for recovering differential duty and imposing penalties. The Commissioner dropped the proposals, but the Central Board directed an appeal to CESTAT. The Tribunal dismissed an application to amend the cause-title, as it would introduce a new respondent not part of the original appeal. The appeal was dismissed based on the dropping of the demand order by the Commissioner. The Court held that if the dropping of duty demand against ACPL was final, there could be no grievance against dropping the penalty against AMPL, as it was related to the same violation.

Issue 2: Correctness of applying a previous Tribunal decision to the current case
During the proceedings, the Department admitted not filing separate appeals against ACPL or Shri Chander Kothari. They sought to amend the cause-title of the appeal to substitute ACPL for AMPL. The Tribunal dismissed this application, stating it would introduce a new respondent not part of the original appeal. The appeal was also dismissed on grounds related to the dropping of the demand order by the Commissioner. The Court emphasized that since the dropping of the duty demand against ACPL was final, there could be no valid grievance against dropping the penalty against AMPL.

Issue 3: Dismissal of appeal by CESTAT without delving into case merits
After hearing arguments, the Court concluded that since the dropping of the demand against ACPL had become final, there was no genuine grievance against dropping the penalty against AMPL. The Court found the appeal devoid of merits and held that no substantial question of law arose for consideration. Consequently, the appeal was dismissed with no costs awarded.