2022 (2) TMI 198 - HC - Central Excise

Recovery of Central Excise Duty - Clearances made by not making consignment-wise payment without utilising cenvat credit shall not be deemed to have been cleared without payment of central excise duty - HELD THAT - The assessee submitted their reply dated 26.10.2007 stating that they are a small scale unit engaged in the manufacture of engineering goods and those goods would fall under Chapter 73 of the Central Excise Tariff Act on tailor made basis. Further, they stated that they have failed to pay the duty of ₹ 6,15,000/- by the due date, i.e., 05.09.2007 as they were facing financial hardship but they have paid the entire amount of duty with interest on 18.10.2006. Further, they stated that there is no mens-rea on their part for not paying the duty on time but they have paid it along with interest subsequently. Certain other explanations were also given on facts. The assessee was granted an opportunity of personal hearing. The Commissioner adjudicated the matter and took note of the fact that the duty has been paid by the assessee along with interest and, therefore, was of the view that further interest need not be levied. However, with regard to the clearances effected by the assessee during the relevant period, the Commissioner confirmed the proposal in the show cause notice by demanding the duty amount. The relief granted to the assessee was with regard to the levy of interest under Section 11AB and penalty under rules 25 and 27 of the Rules. The revenue filed appeal before the Tribunal. As rightly contended by the learned senior standing counsel for the appellant/revenue, the Tribunal did not go into the aspect as to whether the relief granted to the assessee by not levying interest and penalty was justified or not, but proceeded on the basis that rule 8(3A) of the Rules based on which duty has been demanded has been struck down by various High Courts in the country - the finding rendered by the Tribunal with regard to the validity of rule 8(3A) of the Rules has to be left open. However, with regard to the relief which was granted by the Commissioner to the assessee for not levying interest and penalty is concerned, on facts, no question of law arises for consideration on the said issue. Application disposed off.

Summary

Issues:
1. Condonation of delay in filing the appeal under Section 35G of the Central Excise Act, 1944.
2. Substantial questions of law raised by the revenue in appeal CEXA/31/2021 regarding the dismissal of the appeal by the Tribunal.

Condonation of Delay:
The High Court of Calcutta considered an appeal filed by the revenue under Section 35G of the Central Excise Act, 1944, which had a delay of 906 days. The court noted that the reasons provided for the delay were not fully convincing. Despite this, the court decided to exercise discretion and condone the delay in filing the appeal. The delay was ultimately condoned, and the application was disposed of accordingly.

Substantial Questions of Law in Appeal CEXA/31/2021:
In the appeal CEXA/31/2021, the revenue raised substantial questions of law for consideration. The issues included whether the Tribunal rightly dismissed the appeal when the matter was stayed by the Supreme Court, whether the Tribunal's order was considered perverse due to lack of appropriate findings on the contentions raised by the Department, and whether the Tribunal erred in deciding the appeal contrary to the records placed before it. The case involved a show cause notice alleging central excise duty evasion, with the Commissioner confirming the duty amount for clearances made by the assessee. The Tribunal's decision was based on the invalidity of a specific rule, which had been challenged in various High Courts. The High Court, however, found no question of law regarding the relief granted to the assessee and confirmed the Commissioner's order based on this aspect. The validity of the rule in question was left open as it was pending before the Supreme Court. Ultimately, the High Court concluded that no question of law arose for consideration in the appeal, leading to its disposal.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the arguments presented, and the court's decision-making process, ensuring a thorough understanding of the legal aspects discussed in the case.