2021 (11) TMI 658 - HC - Central Excise

Recovery of amount deposited in the Escrow account - forfeiture for the alleged violation of the conditions of the exemption notification availed by the appellant - manufacture of Pan Masala and Pan Masala containing tobacco - exemption under Notification No. 8/2004-CE dated 21.01.2004, as amended by Notification No. 28/2004-CE dated 09.07.2004 - Period from March 2004 to March 2005 - monetary amount involved in the appeal. Maintainability of appeal - monetary involvement is below ₹ 1 Crore as notified by the Central Board of Indirect Taxes Customs (CBIT C) circular dated 22.08.2019 - HELD THAT - In so far as the High Court is concerned, the Monetary Limit prescribed is 1(one) Crore below which no Appeals can be filed before the High Court. However, Clause 4 of the said instructions prescribes that where substantial questions of law are involved, the matters will be contested irrespective of Monetary Limit prescribed - In matters where a common principle may be involved, the High Court can entertain appeal subject of course to the provisions of Section 35G of the Central Excise Act. A reference to Section 35G of the Central Excise Act, 1944 shows that an appeal shall lie to the High Court from every order passed by an appellate Tribunal provided that the High Court is satisfied that the matter involves substantial questions of law. The appeal under Section 35G is a qualified appeal and not an absolute and/or unqualified and/or unrestricted appeal - The High Court has no jurisdiction to go behind or question the facts found by the Tribunal unless on the ground of perversity. A perusal of the order dated 31.03.2017 passed by the Commissioner, will reveal that the show-cause Notices which were issued against the assessee for wrong utilization of credit during the period of March, 2004 to March, 2005 has already been dropped by the Additional Commissioner, Central Excise, Dibrugarh vide order dated 30.01.2009 and there is no pending show cause Notice issued to the assessee in relation to admissibility of CENVAT credit - Tribunal had correctly rendered a finding that the benefit of exemption has been denied to the assessee. Since, as discussed above, the findings arrived at by the Addl. Commissioner, Central Excise, Dibrugarh in its Order- in-Original dated 30.01.2009 were not challenged by the Department before any higher forum, the same had therefore attained finality. The issue of wrong utilization of credit by the assessee during the period of March, 2004 to March, 2005 having been already dropped by the Additional Commissioner, Central Excise, Dibrugarh vide order dated 30.01.2009 and no appeal having been preferred by the Department against such finding, the matter has attained finality. The said finding of fact is also accepted by the Commissioner, Central Excise as is seen in the order dated 31.03.2017 - no substantial question of law arises in this appeal and we are therefore, not persuaded to accept this appeal in view of the mandate of Section 35G of the Central Excise Act, 1985. The provisions of Section 35G mandates that an appeal under Section 35G of the Central Excise Act can only be admitted/heard by the High Court only on the substantial question of law framed. However, in the present proceedings, there was no substantial question of law framed by the appellant with regard to the perversity as raised by the appellant - The Apex Court in S.R. TEWARI VERSUS UNION OF INDIA (UOI) AND ANR. 2013 (5) TMI 970 - SUPREME COURT held that if the decision is arrived at on the basis of no evidence or thoroughly unreliable evidence and no reasonable person would act upon it, the order would be perverse. The Apex Court held that if there is some evidence on record which is acceptable and which could be relied upon, the conclusions would not be treated as perverse and the finding would not be interfered with. Appeal dismissed.

Summary

Issues Involved:
1. Maintainability of the appeal based on the monetary limit prescribed by the Central Board of Indirect Taxes & Customs (CBIT&C).
2. Admissibility and utilization of CENVAT credit by the assessee.
3. Refund of duty paid through TR-6 challan.
4. Interpretation of exemption notifications in light of the Supreme Court's judgment in Commissioner of Customs (Imports), Mumbai vs. Dilip Kumar and Company & Ors.
5. Alleged perversity in the Tribunal's judgment.

Detailed Analysis:

1. Maintainability of the Appeal:
The primary issue raised was whether the appeal was maintainable given the monetary limit of ?1 Crore prescribed by the CBIT&C circular dated 22.08.2019. The court noted that the monetary involvement in the present proceedings was disputed, with the appellant claiming it exceeded ?1 Crore when combining ?98,83,695.35 and ?3,88,344.65. The court held that the monetary limit is not an absolute bar and that appeals involving substantial questions of law can be entertained irrespective of the monetary limit. The court referenced the Supreme Court judgment in Commissioner of Income Tax, Central III vs. Surya Herbal Limited, which allows for exceptions to the monetary limit in cases with potential cascading effects or common principles involved. Thus, the appeal was deemed maintainable.

2. Admissibility and Utilization of CENVAT Credit:
The Tribunal's decision to allow CENVAT credit was challenged. The court observed that the Additional Commissioner, Central Excise, Dibrugarh, had previously dropped charges against the assessee for the wrong utilization of credit for the period March 2004 to March 2005, and this finding was not challenged by the Department. The court emphasized that the findings of the Additional Commissioner had attained finality and that there was no scope for re-examining the issues without fresh show cause notices. Consequently, the Tribunal's decision to allow the CENVAT credit was upheld, and no substantial questions of law were found in this regard.

3. Refund of Duty Paid through TR-6 Challan:
The Tribunal had ordered a refund of the duty paid by the assessee through TR-6 challan. The court noted that the Additional Commissioner had found that the assessee had paid duty twice—once through CENVAT account and once by cash deposit, which was as good as non-availment of CENVAT credit. Since these findings were not challenged and had attained finality, the Tribunal's order for a refund was upheld. The court found no substantial question of law in the Tribunal's decision to allow the refund.

4. Interpretation of Exemption Notifications:
The appellant argued that the Tribunal's judgment violated the Supreme Court's ratio in Commissioner of Customs (Imports), Mumbai vs. Dilip Kumar and Company & Ors, which mandates strict interpretation of exemption notifications. The court acknowledged the principle but found that the facts of the present case did not support the appellant's argument. The findings of fact by the Additional Commissioner, which were not challenged, indicated that the assessee had complied with the exemption notifications. Therefore, the court held that the Tribunal's interpretation did not contradict the Supreme Court's judgment, and no substantial question of law arose.

5. Alleged Perversity in the Tribunal's Judgment:
The appellant orally submitted that the Tribunal's judgment was perverse due to wrong appreciation of facts. The court noted that no specific pleadings or substantial questions of law regarding perversity were framed in the appeal. The court referenced the Supreme Court's criteria for perversity, which include decisions based on no evidence or thoroughly unreliable evidence. Since no such specific pleadings were made, the court found no grounds to consider the judgment perverse. The appeal was dismissed on this ground as well.

Conclusion:
The appeal was dismissed as the court found no substantial questions of law and upheld the Tribunal's findings on all issues, including the maintainability of the appeal, admissibility of CENVAT credit, refund of duty, interpretation of exemption notifications, and the alleged perversity of the Tribunal's judgment. No costs were awarded.