2018 (1) TMI 1050 - AT - Central Excise

Whether the duty liability has been reworked out in the denovo proceedings in proper compliance with the directions laid down by the Tribunal in its earlier final order dated 20.9.2007? - Held that - With such remand directions before him, it was incumbent on the authority adjudicating denovo, to have analyzed the matter afresh to satisfy himself whether there was cogent findings based on irresistible evidence concerning the allegation that the assessee had clandestinely manufactured and removed excisable goods. We are unable to find any attempt in this direction in the entire impugned order. In our view, the denovo adjudication order is nothing but a rehash of the earlier one which was set aside by the Tribunal - Without any further cogent or reasoned discussion thereafter, the adjudicating authority has proceeded to confirm the very same amount of ₹ 15,88,954/- on the appellant without any justification. When the Tribunal had vacated the penalty and which decision became final since not appealed by the Revenue, we are at a loss to fathom how and why the Commissioner in his denovo proceedings has once against foisted even a higher quantum of penalty under different provisions. Not only that, he has also sought to demand interest which was not demanded in the earlier adjudication order. The adjudicating authority has not complied with the directions given in the earlier order of the Tribunal dated 20.9.2007 and has not brought forth findings based on irresistible evidence to uphold allegations of clandestine manufacture and removal - appeal allowed.

Summary

Issues involved:
1. Duty liability on iron and steel castings supplied by the appellant to various entities.
2. Imposition of penalties under different provisions of law.
3. Compliance with directions from the Tribunal's earlier final order.
4. Justification of duty demand, penalty, and interest in denovo proceedings.

Detailed Analysis:

1. Duty Liability:
The case involved M/s. Jagadeesh Steels (M/s. JS) being engaged in manufacturing and clearing castings and cast articles of iron and steel, parts of railway, tramway, and machinery. The issue was regarding the demand of duty on iron and steel castings supplied by M/s. JS to different entities during a specific period. The investigation revealed discrepancies in the handling of castings, including allegations of clandestine removal and non-payment of duty. The initial order confirmed a demand of differential duty and imposed penalties under various provisions of law. In the subsequent denovo proceedings, the Commissioner once again confirmed the duty demand, extended the period of limitation, and imposed penalties and interest, leading to the appeal before the Tribunal.

2. Imposition of Penalties:
Initially, penalties were imposed on M/s. JS under Rule 9(2), 173Q, and 226 of Central Excise Rules, 1944. However, in the appeal, the Tribunal vacated certain penalties based on specific grounds, leading to a remand for reconsideration of duty liability invoking the extended period of limitation. In the denovo proceedings, the Commissioner reconfirmed the duty demand and imposed penalties and interest. The appellant contended that the penalties should not have been re-imposed after the Tribunal's directions and that the adjudicating authority failed to provide irresistible evidence to support the allegations.

3. Compliance with Tribunal's Directions:
The core issue revolved around whether the duty liability was reworked in compliance with the Tribunal's earlier final order. The Tribunal had directed the Commissioner to reconsider the duty liability based on cogent findings and irresistible evidence. However, the denovo adjudication failed to conduct an independent analysis as directed, instead relying on the same documents and evidence from the previous order. The Tribunal's remand directions were not adequately followed, leading to a lack of justification for duty demand, penalties, and interest imposed in the denovo proceedings.

4. Justification of Duty Demand, Penalty, and Interest:
The Tribunal found that the adjudicating authority did not comply with the Tribunal's directions from the earlier order. There was a lack of cogent findings based on irresistible evidence to support the allegations of clandestine manufacture and removal of excisable goods. The denovo order was deemed a rehash of the earlier one, with no fresh analysis conducted. The imposition of penalties and interest without proper authority and justification led to the Tribunal setting aside the impugned order and allowing the appeal with consequential relief.

In conclusion, the Tribunal found that the adjudicating authority failed to adhere to the Tribunal's directions, leading to the setting aside of the impugned order due to lack of proper justification for duty demand, penalties, and interest in the denovo proceedings.