2014 (5) TMI 528 - HC - Central Excise

Maintainability of appeal - Substantial question of law - manufacturing and clearance of goods without payment of excise duty - Whether it involves any substantial question of law within the meaning of Section 35G ibid - Held that - once the Tribunal upheld the current finding of adjudicating authority and that of CCT (Appeals), then it would not involve any substantial issue of law as such and it would be binding on this Court. In other words, this Court in its appellate jurisdiction under Section 35G ibid, would not again de novo hold yet another factual inquiry with a view to find out as to whether explanation offered by assessee and which did not find acceptance to the Tribunal is good or bad, or whether it was rightly accepted, or not. It is only when the factual finding recorded had been entirely de hors the subject, or that it had been based on no reasoning, or based on absurd reasoning to the extent that no prudent man of average judicial capacity could ever reach to such conclusion, or that it had been found against any provision of law, then a case for formulation of substantial question of law on such finding can be said to have been made out, such is not the case here. - Decided against assessee.

Summary

Issues:
Appeal under Section 35G of the Central Excise Act, 1944 against Tribunal's order; Substantial question of law for consideration; Clandestine removal of goods without payment of excise duty; Imposition of penalty under Section 11AC; Interpretation of provisions of Act, circular, or Rule.

Analysis:
The judgment pertains to an appeal filed under Section 35G of the Central Excise Act, 1944 against a Tribunal order dismissing the appeals filed by the assessee. The main issue for consideration was whether the appeal involved any substantial question of law as required under Section 35G. The assessee was engaged in manufacturing man-made fabrics chargeable to central excise duty. The case revolved around the clandestine removal of goods without payment of excise duty, which was found to be established against the appellant after examination by the adjudicating authority, Commissioner of Appeals, and the Tribunal.

The appellant contended that there was no factual basis for the finding of clandestine removal of goods and that the Tribunal's decision was perverse. However, the Court held that the matter involved a question of fact, not a substantial question of law. The Court emphasized that it could not re-examine factual issues or draw inferences based on the assessee's explanations once accepted by the Tribunal. The Tribunal's finding on the issue of clandestine removal was considered detailed and based on evidence, making it non-justiciable as a substantial question of law under Section 35G.

Regarding the imposition of penalty under Section 11AC, the Court held that once clandestine removal of goods was established, the element of mens rea against the assessee was proven, justifying the penalty. The appeal did not involve the interpretation of any provision of the Act, circular, or Rule, nor did it raise any question of law on admitted facts under Section 35C. Consequently, the Court dismissed the appeal, ruling that it did not present any substantial question of law and did not merit interference. The judgment concluded by stating that no costs were awarded in the case.