2013 (9) TMI 384 - AT - Central Excise

Restoration of Appeal - Main contention of the revenue was that the appellants had not produced the correct documents and/or they have produced incorrect documents to the Tribunal which had resulted in setting aside the orders on the ground of limitation only - Held that - The applications filed by the department were liable to be dismissed as such as there cannot be any application for restoration of appeals - At the most the applications could have been for rectification of mistakes, if any, on the face of the record - The applications filed by the department were took up as application for rectification of mistake apparent on the face of the record - The applications which were filed by the department were for the restoration of appeals which were allowed by the bench after hearing to both sides at length. Manipulation of ER-1 - Revenue was of the view that the appellant had manipulated the ER-1 returns which were produced before the Tribunal for obtaining relief on the ground of limitation - Held that - The stand taken by the Revenue in both the applications seems to be totally erroneous and misguided and misconstrued, to such an extent that it was unsubstantiated wild allegation - The applications which were made by the department are misconstrued and were baseless as from random sample which had been taken up for verification. The assessee had indicated the quantitative discount on which no excise duty had been paid and cleared by them during the relevant period, and intimated the department - The downloaded pages from CBEC site, also indicate that the quantitative discounts were feeded in by the appellant during relevant period - before filing such an application, it was imperative on the part of the senior officers to verify the claims of the field formation, regarding such a serious allegation, as to manipulation of the returns that were filed before the Tribunal - the senior officers should have viewed, vetted the entire issue in a proper perspective and should have first understood the implication before filing the applications before the Tribunal - Decided against Revenue. Initiating Enquiry - Jurisdictional Commissioner was directed to initiate an enquiry to fix the responsibility and take appropriate action against the erring officers who had filed frivolous applications before the Tribunal.

Issues Involved:

1. Whether the applications for restoration of appeal filed by the Revenue are maintainable.
2. Whether the ER-1 returns submitted by the assessee were manipulated.
3. Whether the Tribunal's earlier decision on the ground of limitation was correct.
4. Responsibility and action against erring officers who filed frivolous applications.

Issue-wise Detailed Analysis:

1. Maintainability of Applications for Restoration of Appeal:

The Revenue filed applications for the restoration of appeals which were previously allowed by the Tribunal on the ground of limitation. The Tribunal noted that the applications for restoration of appeals were not maintainable. Instead, the correct procedural approach should have been filing applications for rectification of mistakes apparent on the face of the record. Despite this procedural error, the Tribunal considered the applications as requests for rectification and proceeded to dispose of them by a common order.

2. Allegation of Manipulated ER-1 Returns:

The Revenue alleged that the assessee had manipulated the ER-1 returns submitted to the Tribunal to obtain relief on the ground of limitation. The Tribunal examined the original ER-1 returns submitted by the assessee to the range office and compared them with the returns produced before the Tribunal. The Revenue claimed that the ER-1 returns filed with the department did not contain details of quantity of P & P medicaments cleared without payment of duty under quantitative discount. However, the Tribunal found that the returns produced by the assessee did show such details, and the downloaded returns from the CBEC site corroborated the assessee's claims. The Tribunal concluded that the Revenue's allegations were unsubstantiated and baseless.

3. Tribunal's Decision on Limitation:

The Tribunal reaffirmed its earlier decision that the demand was time-barred. It was found that the assessee had been filing monthly ER-1 returns, which included details of goods cleared without payment of duty under quantitative discount. These returns were accepted by the lower authorities without seeking further clarification. The Tribunal held that the adjudicating authority had erred in holding against the assessee on the basis of limitation, as there was no evidence of any correspondence from the lower authorities questioning the details provided in the returns.

4. Responsibility and Action Against Erring Officers:

The Tribunal directed the jurisdictional Commissioner to initiate an enquiry into the incident and fix responsibility on the erring officers who filed frivolous applications before the Tribunal. The Tribunal emphasized the importance of senior officers verifying the claims of field formations regarding serious allegations before filing applications. The Tribunal found that the applications made by the department were misconstrued and baseless, and thus, dismissed them as devoid of merits.

Conclusion:

The applications for restoration of appeal filed by the Revenue were dismissed as they were procedurally incorrect and lacked merit. The Tribunal found no evidence to support the Revenue's allegations of manipulated ER-1 returns and upheld its earlier decision that the demand was time-barred. The Tribunal also directed an enquiry to be initiated against the officers responsible for filing frivolous applications.

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