2020 (10) TMI 377 - AT - Central Excise

Allowability of common registration - doctrine of merger - HELD THAT - Revenue have accepted the order dated 31.01.2014 passed by the jurisdictional Commissioner, granting common registration and have not filed any appeal against the same. Further, the issue of revocation of amended registration certificate has also attained finality by the order of the Hon ble Rajasthan High Court in favour of the respondent-assessee. Accordingly, the present show cause notice proceeding is hit by both doctrine of merger and also under the doctrine of in - subordination . There is no merit in the appeal of the Revenue - Appeal dismissed.

Issues Involved:
1. Allowability of 'common registration' for the respondent manufacturer of cement.
2. Revocation of the amendment in the registration certificate by the Deputy Commissioner.
3. Entitlement to CENVAT credit on capital goods.
4. Doctrine of merger and subordination in administrative orders.

Issue-Wise Detailed Analysis:

1. Allowability of 'Common Registration':
The respondent-assessee was allotted a single contiguous piece of land and commenced manufacturing of cement in 1981. They expanded by establishing a new grinding unit (MGU) on the same plot, connected by a private road and a dedicated conveyor belt. The respondent requested an amendment to their existing Central Excise registration to include MGU. The Assistant Commissioner accepted this and issued an amended registration certificate. However, the Anti Evasion team later found that the new unit was on a separate piece of land with its own boundary wall and was not interlinked with the existing unit at the time of the amendment application. The jurisdictional Commissioner eventually granted single registration for the two premises prospectively.

2. Revocation of Amendment in Registration Certificate:
The Deputy Commissioner revoked the amendment in the registration certificate without giving the respondent an opportunity for a hearing, which was later set aside by the Commissioner (Appeals). The respondent filed an appeal against the revocation, and the Commissioner (Appeals) restored the amendment to the Central Excise registration. The Tribunal and the High Court of Rajasthan upheld this decision, emphasizing that the Revenue cannot pass unilateral orders without hearing the other party and that the issue of single registration had already been settled in favor of the respondent.

3. Entitlement to CENVAT Credit on Capital Goods:
The Anti Evasion unit issued a show cause notice proposing that the CENVAT credit on capital goods related to MGU taken during April 2012 to November 2013 should be reversed. The Commissioner adjudicated the notice, allowing credit from 31.01.2014 but disallowing certain amounts as irregular. The respondent challenged this order before the Tribunal. The Tribunal dismissed the Revenue's appeal against the Commissioner (Appeals)'s order, which had restored the amendment to the registration.

4. Doctrine of Merger and Subordination:
The respondent argued that the proceedings were ab initio bad and hit by the 'doctrine of merger' since the jurisdictional Commissioner had already granted common registration, which was not appealed by the Revenue. The High Court of Rajasthan's order further solidified this position, stating that the issue of common registration had attained finality. The Commissioner (Appeals) also observed that raising the issue again was illegal and against settled judicial decisions. The Tribunal upheld these views, dismissing the Revenue's appeal and confirming that the respondent was entitled to consequential benefits.

Conclusion:
The Tribunal dismissed the Revenue's appeal, holding that the issue of common registration was conclusively settled in favor of the respondent by higher authorities and the High Court. The proceedings were deemed to be hit by the 'doctrine of merger' and 'doctrine of in-subordination,' affirming the respondent's entitlement to the amended registration and associated CENVAT credits.

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