2009 (9) TMI 357 - AT - Central Excise

Appeal to Appellate Tribunal- Revenue has come in appeal against the order passed by the learned Commissioner (Appeals) allowing relief to the assessee on merits waving penalty and interest. Held that- We are surprised to note how the learned Commissioner (Appeals) without evaluating the evidence on record both oral and documentary could safely rely on the submission of the assessee when evidence on record self-speak the nature of the allegation and gravity thereof thus it would be proper to remit back the matter for reappraisal and evaluation of evidence giving regard to the weight of evidence and to come to a rational conclusion. When governing facts and surrounding circumstances suggest fate of the fact there is no question of any assumption or presumption which are sworn enemies of justice. Therefore learned Commissioner (Appeals) after granting fair opportunity to both the sides shall properly consider weight of evidence and pleadings of both sides and pass a reasoned and speaking order on both the aspect of merit as well as on limitation issue which have emanated from cause of action. In the result we remand the matter to the learned lower appellate authority to pass appropriate order in accordance with law. The appeal is allowed by way of remand.

Summary

Issues:
1. Appeal against order allowing relief to assessee and waving penalty and interest.
2. Maintainability of appeal filed by Chief Commissioner under Section 35B(2) of the Act.
3. Allegation of clandestine removal of goods and undervaluation.
4. Failure to evaluate evidence by the learned Commissioner (Appeals) and granting relief to the assessee.
5. Question of time-bar in adjudication proceedings.

Issue 1:
The Revenue appealed against the order granting relief to the assessee and waiving penalty and interest under the Central Excise Act, 1944. The Revenue contended that the Commissioner (Appeals) erred in discarding crucial evidence of clandestine removal of goods and undervaluation, causing prejudice to revenue. The Commissioner (Appeals) relied on respondent's pleas without proper evaluation of evidence, leading to a grave error of law and injury to Revenue.

Issue 2:
The Respondents raised a preliminary objection regarding the maintainability of the appeal filed by the Chief Commissioner under Section 35B(2) of the Act. They argued that only a Commissioner could file such an appeal. However, the Tribunal held that the Chief Commissioner, being a "Central Excise officer," had the statutory authority to exercise the powers of a Commissioner as per Rule 3 of the Central Excise Rules, 2002. The Tribunal found no legal basis to reject the appeal on the grounds of maintainability.

Issue 3:
The adjudicating authority found evidence of clandestine removal of goods and undervaluation, leading to duty liability for the assessee. However, the learned Commissioner (Appeals) failed to evaluate the evidence properly and granted relief to the assessee based on unsubstantiated submissions. The Tribunal observed legal infirmities in the appellate order and remanded the matter for a reassessment of evidence to arrive at a rational conclusion.

Issue 4:
The Tribunal noted that the learned Commissioner (Appeals) overlooked crucial evidence of parallel invoices and undervaluation, relying solely on the respondent's submissions. The Tribunal emphasized the importance of evaluating all evidence and giving weight to the principles of preponderance of probability to ensure a just decision. The matter was remanded for a thorough reevaluation of evidence.

Issue 5:
The question of time-bar in the adjudication proceedings was considered a mixed question of fact and law. The Tribunal highlighted that the conduct of the assessee would determine the motive behind duty evasion, impacting the decision on the time-bar aspect. The Tribunal emphasized the need for a fair assessment of evidence and a reasoned order on both the merit and limitation issues.

In conclusion, the Tribunal remanded the matter to the lower appellate authority for a comprehensive reassessment of evidence and a reasoned decision in accordance with the law. The appeal was allowed by way of remand.