1992 (8) TMI 88 - SC - Central Excise

Whether the Tribunal correct to say by the impugned order came to the conclusion that it was bound by an earlier decision of the Tribunal and, therefore, the controversy in these appeals was not open for a fresh consideration? Held that - The findings of the Collector on appeal about the nature of the amount of ₹ 5,000/- claimed as deduction by the appellant and the justification of that deduction were at variance with the findings rendered by the Assistant Collector. In this situation it was incumbent upon the Tribunal to first determine the nature of this amount and then to proceed for deciding the justification for granting that deduction. The Tribunal without adverting to this obvious position proceeded on the misapprehension that it was precluded from deciding the question on merits because of an earlier decision of the Tribunal regarding an earlier period. The only reason on which the Tribunal dismissed the appeal without going into the facts on the basis of which the question of law had to be decided, is, therefore, unsustainable. In this situation, where the Tribunal has not recorded its findings on the disputed facts and these being at variance in the findings rendered by the Assistant Collector and the Collector, the only appropriate course to adopt is to remit the matter to the Tribunal for a fresh decision.

Summary

Issues:
1. Interpretation of the principle of res judicata in the context of a Tribunal's decision.
2. Determination of the nature and justification for a deduction claimed by the appellant.
3. Discrepancy in findings between the Assistant Collector and the Collector regarding the deduction claimed.
4. Applicability of Rule 6(a) of Valuation Rules, 1975 in the context of the deduction claimed.

Analysis:
The Supreme Court heard appeals under Section 35L(b) of the Central Excises and Salt Act, 1944 against a common order made by the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal had dismissed the appeals based on the principle of res judicata, citing an earlier decision. The Court noted that the Tribunal did not examine the facts or the point of law raised for determination, leading to an unsustainable dismissal of the appeals. The Court emphasized that the Tribunal should have determined the nature of the deduction claimed before deciding on its justification. As the findings of the Assistant Collector and the Collector were at variance, the Court held that the matter should be remitted to the Tribunal for a fresh decision.

The controversy in the case arose from the appellant's claim for a deduction of Rs. 5,000 from the retail selling price for computing excise duty. The Assistant Collector observed that the deduction was for after-sale services and dealer's commission. In contrast, the Collector found that the amount did not fall under trade discount and that the appellant's claim for deduction changed over time. The Collector also noted that the appellant had not substantiated the nature of the services for claiming the deduction, as required by Rule 6(a) of Valuation Rules, 1975.

The Court found that the Tribunal's reliance on the principle of res judicata was misplaced, as the findings of the Assistant Collector and the Collector were contradictory. Therefore, the Tribunal's failure to determine the nature of the deduction and its justification was deemed unsustainable. The Court allowed the appeals, set aside the Tribunal's order, and remitted the matters for a fresh decision. The Tribunal was directed to provide both parties with a fresh opportunity for hearing and to decide the appeals on merits in accordance with the law. No costs were awarded in this case.