1996 (9) TMI 226 - AT - Central Excise

Summary

Issues:
Jurisdiction of CEGAT to decide cases involving interest on delayed payment not collected as duty under Central Excise Act.

Analysis:

The case involved a dispute regarding the recovery of interest on delayed payment not collected as duty under the Central Excise Act. The respondents were asked to pay a shortfall of duty, and despite issuing cheques, the full amount was not paid. The Asstt. Collector initiated proceedings for recovery, including interest, which was challenged before the Collector (Appeals). The Tribunal, after considering the evidence, held that the order of lower authorities levying and collecting interest was not sustainable. The recovery of interest was set aside by the Tribunal.

The jurisdiction of CEGAT to decide such cases was questioned by the respondent Commissioner, arguing that the Tribunal can only pass orders on issues covered by the Central Excise Act and rules framed thereunder. It was contended that the Tribunal lacked jurisdiction to deal with matters not covered by the Act.

On the other hand, the advocate for the respondents argued that a reference to the High Court on a question of law can only be made if the question arises out of an order passed by the Tribunal. Citing a Supreme Court case, it was explained that a question must be raised before the Tribunal or dealt with by it to be considered as arising out of its order. In this case, since the question regarding jurisdiction was not raised or considered by the Tribunal, it was concluded that it did not arise out of the Tribunal's order.

Ultimately, it was held that since the issue regarding jurisdiction did not arise out of the Tribunal's order, there was no basis for making a reference to the High Court. As a result, the reference application was rejected, and the decision of the Tribunal to set aside the recovery of interest was upheld.