2015 (9) TMI 574 - HC - Central Excise

Denial of exemption claim - Whether the Load Spreading Plates (LSP) manufactured by the three Appellants and Towers can be considered to be covered under Wind Operated Electricity Generator, its components and parts , which are exempted under Notification No. 6 of 2006 - tribunal has clubbing the three appeal and delivered different decisions - Held that - Tribunal held that various judicial pronouncements have, according to the Counsel, allowed exemption to Towers and their parts. However, no judicial pronouncement regarding exemption to foundation parts, namely, Anchor Rings and LSP has been brought to the Tribunal s notice. It is thereafter that the Tribunal attempted to distinguish the case of the present Petitioner. It concluded that a foundation cannot be said to be covered by the Notification. Prima facie , the Tribunal lost sight of the fact that it has to first conclude that all the products, namely, LSP and Anchor Rings, Tower Doors are foundational parts or not. There was no justification for giving different treatment to the case of the Petitioner. The Tribunal was aware of the controversy, the issue before it and stated to be common to all the Appellants. If there was justification for rendering a separate finding in the case of the Petitioner s Appeal, then, in the first instance it is not clear as to why it was clubbed along with other Appeals. If all three Appeals involve similar question and issue, then, it is nor clarified as to what distinguishes only the present Petitioner s case from the other two Appeals. If the issue was of the Exemption Notification, its construction and interpretation, the intention of the Government in granting the exemption, then, it is common to all the Appellants. Order of tribunal set aside - the special Bench of the Tribunal shall call for the records of the Petitioner s Appeal and allow the Petitioner to participate in the proceedings/Reference. - Decided in favour of Assessee.

Summary

Issues:
Challenge to order of Customs, Excise and Service Tax Appellate Tribunal - Maintainability of Writ Petition against Tribunal's order - Rectification of mistakes application dismissal - Exemption claim under Notification dated 1st March, 2006 - Tribunal's order on duty demand, interest, and penalties - Discrepancies in Tribunal's approach to Appeals - Justification for separate treatment of Petitioner's case - Referral of issue to larger Bench - Quashing and setting aside Tribunal's order - Direction for reference to larger Bench - Rectification of Tribunal's mistake.

Analysis:

The High Court of Bombay addressed the challenge against the order of the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai, through a Writ Petition under Article 226 of the Constitution of India. The Petitioner sought relief after the Tribunal dismissed a miscellaneous application for rectification of mistakes on 1st May, 2015, following an initial order on 25th September, 2014. The Petitioner, engaged in manufacturing excisable goods, claimed exemption under a Notification dated 1st March, 2006, which was the subject of dispute leading to a demand for Central Excise Duty, interest, and penalties.

The Tribunal's order partly allowed the Petitioner's Appeal, confirming duty demand and interest while setting aside penalties. However, discrepancies arose as the Tribunal referred a question from the Appeals of other entities to a larger Bench but did not do the same for the Petitioner's case. The Court noted that the issue of exemption under the Notification was common to all Appellants, and there was no justification for treating the Petitioner's case differently. The Tribunal's failure to refer the Petitioner's case to a larger Bench was deemed an error.

The Court found that the Tribunal should have included the Petitioner in the reference to the larger Bench for a consistent decision on the interpretation of the Notification. As the Tribunal failed to rectify this mistake, the Court quashed the Tribunal's order and directed the issue to be referred to a larger Bench for a comprehensive decision. The Court emphasized the importance of uniformity in decision-making and ensuring all parties are treated fairly in similar circumstances.

In conclusion, the Court allowed the Writ Petition, setting aside the Tribunal's order and directing the issue to be referred to a larger Bench for a conclusive decision. The Court highlighted the need for consistency and fairness in adjudication, ensuring all parties are given equal consideration in matters of legal interpretation and exemption claims under relevant notifications.