2022 (7) TMI 874 - HC - Central Excise

Demand of Differential Duty - clearance of acoustic enclosures from their factory - period from 1.4.2000 to 24.6.2002 - HELD THAT - It is seriously taken note of the submission, but since the order passed by the Tribunal is a cryptic one, there are no option but to set aside the same. The Tribunal has not gone into the merits of the case, nor the grounds raised in the Appeal Memorandum of the appellant. The finding entered by the Tribunal cannot be sustainable in law. No reasoning is stated for dismissing the appeal. In view of the matter, it is opined that the final order of the Tribunal has to be interfered with. The matter is remitted to the Tribunal, for reconsideration afresh - appeal allowed.

Summary

Issues:
Challenge against the final order in appeal No. E/185/2008-DD of Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore.

Analysis:
The appellant, engaged in manufacturing diesel generator sets, outsourced the production of acoustic enclosures to reduce noise and heat. The department issued a show-cause notice demanding Rs.10,52,892 towards differential duty on alleged clearance of acoustic enclosures. The Joint Commissioner of Central Excise initially dropped proceedings, but the Commissioner of Central Excise (Appeals) set aside this order, confirming the demand and penalty. The Tribunal dismissed the appeal without addressing the appellant's grounds, stating that the duty must be paid, and the appellant attempted to evade it through connivance with the job worker. The High Court found the Tribunal's order cryptic, lacking reasoning, and set it aside, remitting the matter for reconsideration.

The High Court noted that the Tribunal failed to delve into the case's merits or the grounds raised by the appellant. The Tribunal's decision lacked sustainability in law due to the absence of reasoning. Consequently, the High Court intervened, setting aside the Tribunal's order and remanding the matter for fresh consideration in accordance with the law. The learned Standing Counsel emphasized the connivance between the appellant and the job worker to evade duty, opposing the remand by highlighting the clarity of the show-cause notice regarding the movement of goods. Despite this submission, the High Court found the Tribunal's order insufficient and opted to overturn it for a more thorough review.