2017 (12) TMI 1280 - AT - Central Excise

Jurisdiction - entire case of the appellant M/s Garg Industries is that the SCN dated 20 February, 2008 was adjudicated earlier vide Order-in-Original dated 30 March, 2009. The said Order-in-Original having been withdrawn by the Department, in the appeal/proceedings before Hon ble Supreme Court wherein the said appellant was not even party, the permission obtained for fresh adjudication will not apply in its case - whether the impugned order have been passed validly under jurisdiction and powers vested under the Central Excise Act? Held that - withdrawal of the earlier adjudication order dated 30 March, 2009, without reserving liberty to proceed from the stage subsequent to the stage of the show cause notice dated 20 February, 2008 against M/s Garg Industries and of other concerned parties, we find no lawful authority for proposing a fresh adjudication order viz., the impugned order. We agree with the contentions of the appellant that in view of the withdrawal of the earlier adjudication order without reserving liberty to proceed from the stage of the SCN dated 20 February, 2008 against Garg Industries, we find no lawful authority for passing fresh Order-in-Original, being the impugned order. We hold that the Commissioner is not correct in passing a fresh Order-in-Original dated 31 March, 2013, in respect of the same subject matter for the same period, since the earlier Order-in-Original dated 30 March, 2009 was withdrawn in the separate proceedings, in which some of the present appellants were not even party. Therefore, there was no question of seeking permission from the Hon ble Supreme Court in the case of appellant-M/s Garg Industries to pass a fresh adjudication order. By withdrawing the earlier Order-in-Original dated 30 March, 2009, which was passed again Garg Industries and two individuals, without obtaining permission to pass fresh adjudication order against them, would amount to abandoning the proceedings against the said three parties. There is no provision under the Central Excise Act, 1944, which grants power to the Adjudicating Authority to re-adjudicate the SCN on same facts for same period relating to same clearances once again, the said SCN already having been adjudicated upon by passing of Order-in-Original dated 30 March, 2009. The impugned Order-in-Original is not sustainable - appeal allowed - decided in favor of appellant.

Issues Involved:
1. Validity of the impugned order under the jurisdiction and powers vested under the Central Excise Act.
2. Legality of adjudicating the same Show Cause Notice (SCN) twice.
3. Authority to withdraw the Order-in-Original and re-adjudicate the SCN.
4. Clubbing of clearances and applicability of SSI exemption.
5. Imposition of redemption fine and penalties.

Detailed Analysis:

1. Validity of the Impugned Order:
The primary issue in these appeals was whether the impugned order was validly passed under the jurisdiction and powers vested under the Central Excise Act. The Tribunal concluded that the Commissioner was not correct in passing a fresh Order-in-Original dated 31 March 2013, as the earlier Order-in-Original dated 30 March 2009 had been withdrawn without reserving liberty to proceed from the stage of the SCN dated 20 February 2008 against Garg Industries and others. The Tribunal held that there was no lawful authority for proposing a fresh adjudication order, thus invalidating the impugned order.

2. Legality of Adjudicating the Same SCN Twice:
The Tribunal agreed with the appellants that there is no provision under the Central Excise Act to adjudicate the same SCN twice against the same parties. The Department’s right to proceed against the appellants was considered abandoned once the earlier Order-in-Original was withdrawn without reserving liberty to re-adjudicate the SCN. The Tribunal relied on the principle from the Supreme Court case of Sarguja Transport Service vs. State Transport Appellate Tribunal, which states that withdrawing a suit without permission to file a fresh one amounts to abandoning the proceedings.

3. Authority to Withdraw the Order-in-Original and Re-adjudicate the SCN:
The Tribunal found no power, authority, or jurisdiction under the Central Excise Act enabling the withdrawal of an adjudication order or re-adjudication of the same SCN. The affidavits filed by the Department did not clarify the source of power for such withdrawal or dispute the fact that Garg Industries and the two individuals were not parties to the proceedings before the Supreme Court. The Tribunal emphasized that the order of the Supreme Court did not grant unconditional permission to withdraw the earlier adjudication order but stated that further action could be proceeded with "in accordance with law."

4. Clubbing of Clearances and Applicability of SSI Exemption:
The Tribunal did not delve into the merits of the case regarding the availability of the SSI exemption under Notification No. 8/2003 CE or the applicability of the extended period of limitation. These questions were left open for future consideration.

5. Imposition of Redemption Fine and Penalties:
The Tribunal noted that as per Section 34 of the Act, redemption fine can only be imposed if the goods are available for confiscation. In this case, the seized goods had already been unconditionally released to the respective appellants. Therefore, no confiscation or redemption fine could be imposed. The Tribunal set aside the penalties imposed on Garg Industries and the individuals, including the confiscation of the truck.

Conclusion:
The Tribunal set aside the impugned Order-in-Original dated 31 March 2013, allowing all the appeals with consequential relief. The Tribunal made it clear that it did not examine the merits of the case regarding the SSI exemption and the applicability of the extended period of limitation, leaving these questions open.

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