2010 (2) TMI 343 - AT - Central Excise

Additional evidence- Revenue is aggrieved by the order of the Commissioner (Appeals) setting aside the demand of duty on cotton yarn containing Synthetic Staple fibre manufactured and cleared by the respondents from their factory during the relevant period, on the ground that the final product on which duty demand was raised and confirmed by the adjudicating authority, was not tested to ascertain as to whether it contained synthetic staple fibre and on the ground that sales invoices described the goods as polyester waste and only cotton waste was cleared to the factory of the respondents and further used in the manufacture of cotton yarn. Held that- set aside the impugned order and remand the case for fresh decision to the original authority who shall pass fresh orders after considering all the documents of the assessees and the documents in the form of invoices already filed before the lower appellate authority. Fresh orders are to be passed after extending a reasonable opportunity of hearing of the assessees. The appeal is thus allowed by way of remand.

Summary

Issues:
1. Appeal against the order of the Commissioner (Appeals) setting aside the duty demand on cotton yarn containing Synthetic Staple fibre.
2. Consideration of documents not produced before the adjudicating authority.
3. Application of Rule 5 of the Central Excise (Appeals) Rules in the case.

Analysis:
1. The judgment deals with an appeal against the order of the Commissioner (Appeals) regarding the demand of duty on cotton yarn containing Synthetic Staple fibre. The Commissioner (Appeals) had set aside the duty demand based on certain grounds, including the lack of testing to confirm the presence of synthetic staple fibre and the description of goods in sales invoices as polyester waste. The Appellate Tribunal observed that the final product was not tested for the presence of synthetic staple fibre and that the Commissioner (Appeals) considered documents not submitted before the adjudicating authority.

2. The Appellate Tribunal noted that the assessees had presented a worksheet and invoices to the appellate authority, which were not originally produced before the adjudicating authority. The Tribunal highlighted Rule 5 of the Central Excise (Appeals) Rules, which limits the submission of new evidence during the appeal process. The rule specifies conditions under which new evidence can be presented, such as when the adjudicating authority refused to admit relevant evidence or if there was a sufficient cause preventing the submission of evidence before the lower authority.

3. In applying Rule 5 of the Central Excise (Appeals) Rules to the case at hand, the Appellate Tribunal concluded that the Commissioner (Appeals) should not have based the decision on documents introduced for the first time during the appeal. As the case did not fall under the exceptions outlined in Rule 5, the Tribunal set aside the impugned order and remanded the case to the original authority for a fresh decision. The Tribunal directed the original authority to consider all documents submitted by the assessees, including the invoices filed before the lower appellate authority, and provide a reasonable opportunity for the assessees to be heard.

In conclusion, the appeal was allowed by way of remand, emphasizing the importance of adhering to procedural rules and ensuring that all relevant evidence is considered at the appropriate stages of the adjudication process.