2009 (10) TMI 443 - AT - Central Excise

Remand order- Non Compliance- the respondents are engaged in manufacture of toilet soaps falling under Central Excise sub-heading No. 3401.12 of the Central Excise Tariff Act, 1985. It is the case of the appellants that the respondents did not include freight and handling charges in the assessable value to compute aggregate value of clearance under Notification No. 175/86-C.E., dated 1-3-86 and the same was revealed on scrutiny. Held that- no material which would justify interference in the orders passed by the Additional Commissioner has been brought to the notice, needless to say that on setting aside of the order passed by the Commissioner (Appeals), the order passed by the Additional Commissioner has to be restored and is required to be confirmed. All the four appeals are allowed.

Summary

Issues:
Challenge to orders passed by Commissioner (Appeals) in four appeals filed by respondents against orders passed by Additional Commissioner. Appellants contesting duty payment on freight and handling charges, overdrawal amount due to excess money credit utilization, and penalty imposition. Challenge based on ignoring Tribunal's direction in earlier order and earlier Commissioner (Appeals) order. Cross-objection raised on the basis of earlier Commissioner (Appeals) order.

Analysis:
The judgment involves a challenge to orders passed by the Commissioner (Appeals) in four appeals filed by the respondents against the orders passed by the Additional Commissioner. The appellants contested the duty payment on account of freight and handling charges, overdrawal amount due to excess money credit utilization, and penalty imposition. The challenge was primarily based on the ground that the Commissioner (Appeals) ignored the direction issued by the Tribunal in an earlier order and set aside the orders passed by the Additional Commissioner solely on the basis of an earlier Commissioner (Appeals) order.

The Tribunal noted that the appellants were engaged in the manufacture of toilet soaps and had not included freight and handling charges in the assessable value, leading to a dispute regarding duty payment. The respondents were also found to have overdrawn money credit in contravention of the law. The Additional Commissioner, after remand, carefully considered both issues and found that the respondents failed to provide evidence to support their claims. It was concluded that the plea regarding non-inclusion of handling charges in the assessable value was not sustainable, and the excess money credit utilization was in violation of the relevant notification.

The Tribunal emphasized that the Commissioner (Appeals) failed to comply with its earlier direction to consider the facts established from the records while taking into account the earlier order. The Commissioner (Appeals) set aside the Additional Commissioner's order without verifying if the findings were supported by the records, indicating a lack of application of mind and non-compliance with the Tribunal's directions. Consequently, the impugned order was deemed unsustainable, and the orders passed by the Additional Commissioner were restored and confirmed.

In conclusion, all four appeals were allowed, the impugned orders were set aside, and the orders passed by the Additional Commissioner were restored. The appeals were disposed of accordingly, highlighting the importance of considering factual evidence and complying with tribunal directions in such matters.