2016 (8) TMI 384 - HC - Central Excise

Whether the Tribunal failed to appreciate the law that the omission of Section 3A of the Central Excise Act, 1944 is an Amendment to the Central Excise Act, 1944 and is saved by Section 6A of the General Clauses Act, 1897 - Held that - by applying the decision of Hon ble Supreme Court in the case of M/s.Shree Bhagwati Steel Rolling Mills vs. Commissioner of Central Excise & Anr. 2015 (11) TMI 1172 - SUPREME COURT , upholding compounded levy scheme, striking down the notification as invalid and inoperative, should be treated as a nullity. Therefore, the answer is affirmative and requires to be adjudicated afresh, by the Tribunal. - Matter remanded back

Issues:
1. Determination of annual production capacity and duty rate under the Central Excise Act, 1944.
2. Appeal against the Commissioner of Central Excise (Appeals) order.
3. Dismissal of appeal by the Customs, Excise and Service Tax Appellate Tribunal, Chennai.
4. Filing of Civil Miscellaneous Appeal by the Commissioner of Central Excise, Salem.
5. Substantial questions of law raised in the appeal.
6. Admittance of the appeal based on subsequent developments and legal considerations.

Issue 1: Determination of annual production capacity and duty rate under the Central Excise Act, 1944:
The case involved M/s.Adhavan Processor (P) Ltd, processors of textile fabrics, paying duty under Section 3 of the Central Excise Act, 1944. The compounded levy scheme was introduced under Section 3-A from 16.12.1998, and the annual production capacity was determined by the Commissioner. The Assistant Commissioner of Central Excise, Erode, determined the annual capacity production and the rate of duty applicable per month per chamber. The first respondent challenged the determination, leading to appeals before the Commissioner of Central Excise (Appeals), Salem.

Issue 2: Appeal against the Commissioner of Central Excise (Appeals) order:
The first respondent challenged the determination of annual production capacity and duty rate before the appellate authority, citing a previous High Court judgment that ruled certain rules under the notifications as invalid and inoperative. The appellate authority accepted the contention, setting aside the orders of the jurisdictional Commissioner. This decision was further appealed by the Commissioner of Central Excise, Salem, leading to a dismissal by the Customs, Excise and Service Tax Appellate Tribunal, Chennai.

Issue 3: Dismissal of appeal by the Customs, Excise and Service Tax Appellate Tribunal, Chennai:
The Customs, Excise and Service Tax Appellate Tribunal, Chennai, dismissed the appeal filed by the Commissioner of Central Excise, Salem, citing a writ appeal filed by the Revenue Department that was dismissed for non-prosecution. The dismissal was upheld due to procedural reasons, leading to further legal actions by the Commissioner of Central Excise, Salem.

Issue 4: Filing of Civil Miscellaneous Appeal by the Commissioner of Central Excise, Salem:
The Commissioner of Central Excise, Salem, filed a Civil Miscellaneous Appeal raising substantial questions of law regarding the dismissal of the appeal by the Customs, Excise and Service Tax Appellate Tribunal, Chennai. The questions raised included the correctness of the dismissal, the pending issue before the Supreme Court, and the interpretation of relevant notifications under the Central Excise Act, 1944.

Issue 5: Substantial questions of law raised in the appeal:
The Commissioner of Central Excise, Salem, raised substantial questions of law in the Civil Miscellaneous Appeal, questioning the dismissal of the appeal by the Tribunal, the pending issue before the Supreme Court, and the interpretation of Notification 42/98 under Section 3-A of the Central Excise Act, 1944. These questions highlighted procedural and legal concerns regarding the case.

Issue 6: Admittance of the appeal based on subsequent developments and legal considerations:
The High Court, considering subsequent developments and legal precedents, admitted the appeal by the Commissioner of Central Excise, Salem, on a specific substantial question of law related to the omission of Section 3A of the Central Excise Act, 1944. The Court emphasized the need for fresh adjudication by the Tribunal based on the new substantial question of law framed by the Court, directing proper notice to the respondent/assessee and a speaking order to be passed.

This detailed analysis covers the various issues involved in the legal judgment, highlighting the key legal proceedings, challenges, and decisions made at different stages of the case.

← Previous Next →