2018 (7) TMI 689 - HC - Central Excise

Scope of Remand - the liberty was given to raise all contentions, whether that would entitle to the appellants-assessees to raise other issues also besides the two aspects, for which the aforesaid remand was made by the High Court? - Held that - The contentions left open for the assessees were required to be raised were with regard to these three aspects only and not all the issues other than the aforesaid three aspects were allowed to be raised again in that remand. The said observation was qualified and classified by this Court in the immediately succeeding sub-para of para-18 itself, where this Court classified that the learned Tribunal shall examine both the aspects which are remanded by this Court - The observation which is sought to be relied upon by the learned counsel for the appellants, as if all issues were set at large to be argued again by the assessee is a misconceived argument and the same cannot be accepted. The same is liable to be rejected and accordingly it is rejected. Demand u/s 3A of CEA - availability of Section 3A of the Central Excise Act, 1944, for the period of assessment 2003- 04 & 2004-05 - Held that - The principles enumerated in the provision of S.3A could not therefore be excluded by necessary implication for the period prior to 10.05.2008 as well and therefore, finding of facts arrived at by the Adjudicating Authority and the learned Tribunal which reduced the demand of evaded duty to fall in line with the extent of evasion of duty as indicated in the show cause notice remains a finding of fact and does not give rise to any substantial question of law for consideration by this Court in terms of S.35G of the Act - The said findings of facts on estimated evasion of duty cannot be said to be perverse in any manner, giving rise to any question of law even, much less the substantial question of law which is the essential requirement of invoking S.35G of the Act. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Availability of Section 3A of the Central Excise Act, 1944, for the assessment period 2003-04 & 2004-05.
2. Whether "Gutkha" was notified for the purpose of Section 3A.
3. Whether the demand for excise duty could be raised beyond the quantification in the Show Cause Notice.

Detailed Analysis:

1. Availability of Section 3A of the Central Excise Act, 1944, for the Assessment Period 2003-04 & 2004-05:
The court examined whether Section 3A, which allows for the charge of excise duty based on the capacity of production for notified goods, was applicable for the periods 2003-04 and 2004-05. The provision was brought into effect only on 10.05.2008. The court found that the provision was not available during the assessment periods in question. Therefore, the demand for duty could not be based on Section 3A for those periods. The court noted that the show cause notice and the adjudication order did not refer to Section 3A, confirming that the provision was not invoked for the disputed periods.

2. Whether "Gutkha" was Notified for the Purpose of Section 3A:
The court addressed whether "Gutkha" was a notified good under Section 3A. Upon remand, the Tribunal found that "Gutkha" was indeed notified as a good under Section 3A. However, since Section 3A was not applicable for the periods in question, this finding did not impact the overall judgment regarding the demand for duty.

3. Whether the Demand for Excise Duty Could be Raised Beyond the Quantification in the Show Cause Notice:
The court considered whether the final demand for excise duty could exceed the amount specified in the show cause notice. The Tribunal held that the demand could not go beyond the show cause notice. Consequently, any excess demand raised by the Adjudicating Authority beyond the show cause notice was struck off. The Tribunal upheld the demand only to the extent specified in the show cause notice, which was ?2,82,06,656/-, as opposed to the initially computed ?4,29,95,446/-.

Conclusion:
The court dismissed the appeals filed by the assessees, finding no merit in their contentions. The Tribunal's findings upon remand were upheld, confirming that Section 3A was not applicable for the periods in question, "Gutkha" was a notified good, and the demand for duty could not exceed the amount specified in the show cause notice. The court concluded that the estimation of evaded duty based on production capacity and unaccounted purchases of packing material was valid and did not give rise to any substantial question of law. The appeals were dismissed with no costs.