2016 (4) TMI 105 - HC - Central Excise

Recovery of duty payable - Tribunal has set aside the order passed by the Commissioner on the ground of absence of recovery machinery, and that in the absence of any mechanism for recovery of the amount, the Commissioner of Central Excise ought not to have passed the order for recovery of duty payable by the respondent-Corporation - Held that - On perusal of the material on record, we are of the view that the impugned order does not speak on the merits of the case and legal aspects. Therefore, we feel it appropriate to remand the matter to the Tribunal for fresh consideration, by keeping it open to both the parties to raise all their contentions on factual and legal aspects, available to them under law.

Summary

Issues:
1. Appeal against CESTAT order dated 09.02.2005 regarding liability to pay duty on exempted goods.
2. Interpretation of Rule 57CC of the Central Excise Rules, 1944.
3. Availability of recovery machinery for duty payment.
4. Retrospective amendment of Rule 57CC by the Finance Act, 2005.

Analysis:
1. The appeal was filed by the Revenue against the CESTAT order dated 09.02.2005, challenging the liability of the respondent to pay 8% duty on Sulphuric Acid cleared under Rule 57CC of the Central Excise Rules, 1944. The Commissioner of Central Excise had held the respondent liable for duty payment due to the use of Vanadium Pentoxide in both dutiable and exempted products. The Tribunal set aside the Commissioner's order due to the absence of a recovery mechanism during the relevant period (01.08.1996 to 15.06.1999).

2. The appellant argued that the respondent, engaged in the manufacture of Sulphuric Acid, availed MODVAT credit on inputs used in production. The appellant contended that the respondent should pay duty as per Rule 57CC, especially after the retrospective amendment by the Finance Act, 2005. The Tribunal's decision was criticized for not considering the amendment and setting aside the Commissioner's order without providing reasons.

3. The respondent's counsel emphasized that the Tribunal's decision was based solely on the absence of recovery machinery and argued against raising additional legal and factual issues by the appellant. The Tribunal's focus on the lack of a recovery mechanism led to the setting aside of the duty recovery order issued by the Commissioner.

4. After considering the arguments and the record, the High Court found that the impugned order did not address the merits of the case and legal aspects adequately. Therefore, the Court decided to remand the matter to the Tribunal for a fresh consideration, allowing both parties to present all contentions on factual and legal grounds. The Court directed the Tribunal to expedite the disposal of the appeal within six months from the date of the order.

In conclusion, the High Court set aside the Tribunal's order, remanding the case for a fresh hearing to consider all aspects of the dispute comprehensively.