2019 (11) TMI 612 - HC - Central Excise

Time Limitation - It is the specific case of the appellant/assessee that the entire demand is barred by limitation and therefore, the demand is not sustainable in law - Whether in the facts and circumstances of the case, the Tribunal is right in confirming the demand when the demand itself is barred by limitation? - HELD THAT - The Tribunal did not make any such observation with regard to the limitation point while confirming the order passed by the Commissioner (Appeals). In fact, the assessee is to be partially blamed because, none appeared for the assessee before the Tribunal, when the case was heard - the point relating to limitation being a mixed question of law and fact, should also to be allowed to be agitated by the assessee before the original authority. Whether the Tribunal is right in holding that there was no such submission put forth in the appeal especially when the plea of limitation and correct availment of Cenvat credit on machinery parts pleaded in the appeal grounds? - HELD THAT - There appears to be a dispute between the assessee and the Department. This has been remanded to the original authority for fresh consideration and we confirm such order of remand. Whether the Tribunal is right in holding that there was no dispute about the liability but quantum alone is disputed whereas it was raised in the grounds that the entire demand is barred by limitation and the value adopted on job work yarn clearance is as per the decision of the Supreme Court in UJAGAR PRINTS, ETC. ETC. VERSUS UNION OF INDIA AND OTHERS 1988 (11) TMI 106 - SUPREME COURT ? - HELD THAT - It goes without saying that credit cannot be denied to the appellant/assessee - With regard to the other issues, the order passed by the Commissioner (Appeals), as confirmed by the Tribunal, is just and proper. The impugned order of remand passed by the Tribunal is confirmed and the appellant/assessee is granted liberty to raise the points relating to limitation before the original authority which shall be adjudicated on merits and in accordance with law - the appeal filed by the appellant/assessee is partly allowed.

Summary

Issues:
1. Confirmation of demand by Tribunal despite limitation plea.
2. Remand of matter to original authority without considering limitation plea.
3. Dispute on quantification and remand for fresh consideration.
4. Justification of remand for claiming depreciation under Section 32 of the Act.

Analysis:

Issue 1 - Confirmation of Demand Despite Limitation Plea:
The appellant contended that the entire demand was time-barred, making it legally unsustainable. The Tribunal, while confirming the Commissioner (Appeals) order, failed to address this crucial limitation point. The Court acknowledged the appellant's failure to appear during the Tribunal hearing but emphasized that the limitation issue, being a mixed question of law and fact, should have been allowed for argument before the original authority. Consequently, the Court held that the appellant should be given the opportunity to raise the limitation point before the original authority for proper adjudication.

Issue 2 - Remand Without Considering Limitation Plea:
The Tribunal remanded the matter to the original authority without addressing the appellant's limitation plea. The Court noted this oversight and directed that the appellant should be permitted to argue the limitation issue before the original authority. The Court highlighted the importance of addressing all relevant points, including limitation, during the adjudication process to ensure a fair hearing.

Issue 3 - Dispute on Quantification and Remand:
A dispute arose between the assessee and the Department regarding quantification, leading to a remand for fresh consideration by the original authority. The Court upheld this remand order, emphasizing the need for a thorough review of the quantification issue. By confirming the remand, the Court ensured that the matter would be reexamined to resolve the quantification dispute effectively.

Issue 4 - Claiming Depreciation Under Section 32 of the Act:
The Commissioner (Appeals) had remanded the matter to the original authority to consider the claim of depreciation under Section 32 of the Act. The Court noted the Commissioner's finding that depreciation did not apply to the goods involved, thereby affirming that credit should not be denied based on depreciation reasons. Consequently, the Court upheld the order regarding depreciation and confirmed that credit should not be denied to the appellant.

In conclusion, the Court partly allowed the appeal, confirmed the remand order, and granted the appellant the opportunity to raise the limitation point before the original authority for proper adjudication. The Court emphasized the importance of addressing all relevant issues, including limitation and quantification, during the adjudication process to ensure a just and lawful outcome.