2023 (11) TMI 5 - AT - Central Excise

Recovery of duties of central excise - validity of order beyond the direction in the remand proceedings - activity of manufacture in accordance with note 6 in section XVI of schedule to Central Excise Tariff Act 1985 on welding machines imported - exemptions available to small scale industrial (SSI) units in terms of notification no. 8/2003-CE dated 1st March 2003 - HELD THAT - The impugned order insofar as it relates to the first issue contributing to substantial portion of the demand contains frequent reference to the order that had been set aside by the Tribunal with a direction to be remanded afresh. It does not bear elaboration that it is beyond the scope of remand proceedings before an adjudicating authority to refer to an order that had ceased to exist by order of appellate authority and thus strictly barred from either relying on findings therein or drawing upon assertions therein in denovo proceedings. Further the order now impugned before us appears to be replete with defence of findings in the order that had been set aside by the Tribunal. This is not the intent of a remand by the Tribunal and exemplifies a casual disregard for the nicety of adjudication proceedings and lack of diligence in complying with the orders of appellate authority. Such an order is not amenable to appellate resolutions for those reasons. Matter remanded back to the original authority to undertake fresh proceedings and issue an order that ultimately reflects the application of known law to establish facts by the adjudicating authority in office - appeal allowed by way of remand.

Summary

Issues involved:
The judgment involves issues related to central excise duties, remand proceedings, consideration of evidence, and adherence to legal procedures.

Central excise duties:
The impugned order sought recovery of central excise duties totaling Rs. 1,60,90,582, alleging the activity of 'manufacture' on imported welding machines. Another demand of Rs. 9,14,123 was linked to the ineligibility for exemptions meant for small scale industrial units. The original adjudicating authority's order was not approved by the CESTAT due to the failure to consider expert evidence like the report of the Chartered Engineer and catalogues of welding machines, leading to a remand order for fresh proceedings.

Remand proceedings:
The remand was intended to address aspects not previously considered, despite submissions made by the noticees during adjudication. The Tribunal highlighted the importance of a well-reasoned order covering all submissions, emphasizing the observance of natural justice and the consideration of all relevant factors. The Tribunal found that the impugned order extensively referenced the earlier order that had been set aside, indicating a lack of compliance with remand instructions and a casual disregard for procedural requirements.

Consideration of evidence:
During the proceedings, the appellants presented significant submissions, including expert opinions and explanations regarding the presence of welding machines in their factory for testing and branding purposes. The Tribunal noted the failure to conclusively prove an assignment related to clearances under the brand name 'WE,' leading to a lack of prima facie case in favor of the appellants. Despite the belief that appropriate explanations could be offered, an offer to deposit Rs. 10 lakhs was made to cover the amount related to the 'WE' clearances.

Adherence to legal procedures:
The Tribunal set aside the impugned order and remanded the matter back to the original authority for fresh proceedings. Emphasis was placed on the application of known law to establish facts, highlighting the necessity for diligent compliance with legal orders and the avoidance of referencing findings from previous orders that had been set aside. The judgment concluded by allowing the appeals by way of remand, stressing the importance of upholding procedural integrity in adjudication proceedings.