2022 (1) TMI 761 - HC - Central Excise

Condonation of delay in filing appeal before the Commissioner (appeals) - Levy of excise duty - manufacture of concrete mix at project site for the purpose of construction - applicability of N/N. 4/1997-CE, dated 1.3.1997 - Applicability of similar Notification No.12/2012-CE, dated 17.3.2012 to the subject tax period - applicability of CBIC Circular bearing No.368/1/98, dated 6.1.1998 - HELD THAT - It is not in dispute that the order in original was passed by the adjudicating authority on 14.6.2019 and the writ petition was filed by the appellants before this Court in the month of September 2020. The statute prescribes the limitation period of 60 days with the next 30 days as per the proviso i.e., totally 90 days in filing the appeal before the Commissioner of Central Excise (Appeals) against the order in original under Section 35 of the Act. The appellants having not availed the said statutory remedy, challenged the order in original impugned contending that they have manufactured the concrete mix at the project site which is exempt under Circular dated 6.1.1998 and no RMC was manufactured. It is true that the appellants have not availed the alternative remedy of statutory appeal available under the Act and have filed the writ petition challenging the order in original, but the Writ Court not merely dismissed the writ petition as not maintainable but further proceeded to decide the matter on the merits of the case, thereby concluded that the concrete mix manufactured by the appellants at the project site classified by the adjudicating authority as RMC is justifiable. It would be appropriate in the interest of justice and equity to permit the appellants to prefer an appeal before the first appellate authority i.e., Commissioner of Central Excise (Appeals) to consider the matter on merits without going into the issue of limitation subject to imposing costs and the petitioner depositing the amount as required, for preferring an appeal - In the usual course if the assessee knocks the doors of the Writ Court without exhausting the alternative remedy of appeal available under the Act, no exception can be found with the Writ Court in rejecting the writ petition as not maintainable, but having regard to the peculiar facts and circumstances of the case, as in the present case when the appellants have approached the Writ Court with an alternative relief of seeking permission to file an appeal before the appellate authority, any finding recorded on the merits of the case which indeed relates to facts warrants interference. It is clear that in the absence of power vested with the appellate authority to condone the delay, in the peculiar facts and circumstances of the case, the ends of the justice would be met in permitting the appellants to file an appeal instead of adjudicating the matter on merits subject to conditions imposed - appeal allowed in part.

Summary

Issues Involved:
1. Exemption from excise duty for concrete mix manufactured at the construction site.
2. Classification of concrete mix as Ready Mix Concrete (RMC).
3. Delay in filing the statutory appeal.
4. Jurisdiction and maintainability of the writ petition.

Detailed Analysis:

1. Exemption from excise duty for concrete mix manufactured at the construction site:
The appellants, a private limited company engaged in civil works contracts, manufactured concrete mix at the construction site for use in the Promont Hilltop residential project in Bengaluru. They claimed exemption from excise duty under Notification No.12/2012-CE, which exempts "Concrete mix manufactured at the site of construction for use in construction work at such site." The CBIC Circular No.368/1/98 clarified that concrete mix manufactured at the site is exempt from excise duty, distinguishing it from Ready Mix Concrete (RMC), which is not exempt.

2. Classification of concrete mix as Ready Mix Concrete (RMC):
The adjudicating authority issued a show cause notice alleging that the appellants suppressed the fact of manufacturing RMC. The appellants denied this, asserting they only manufactured concrete mix at the site, which is exempt from excise duty. The Writ Court, relying on the Supreme Court's decision in Larsen and Toubro Ltd. v. Commissioner of Central Excise, classified the concrete mix manufactured by the appellants as RMC, thus subject to excise duty. The appellants argued that the adjudicating authority did not fully consider the characteristics that differentiate concrete mix from RMC, as outlined in the Larsen and Toubro case.

3. Delay in filing the statutory appeal:
The appellants failed to file an appeal within the statutory period due to a lapse by their Tax Consultant. Upon receiving a demand letter, they realized the appeal had not been filed and approached the Writ Court seeking to quash the original order or allow them to file an appeal beyond the limitation period. The Writ Court found the delay unreasonable and dismissed the writ petition.

4. Jurisdiction and maintainability of the writ petition:
The Writ Court dismissed the petition as not maintainable, stating that the appellants should have exhausted the alternative remedy of statutory appeal. However, it also examined the merits of the case, concluding that the concrete mix was correctly classified as RMC. The High Court noted that the Writ Court should not have delved into the merits, as the factual aspects should be analyzed by the statutory authorities.

Conclusion:
The High Court allowed the appeal in part, permitting the appellants to file an appeal before the Commissioner of Central Excise (Appeals) despite the delay, subject to payment of costs and pre-deposit requirements. The appellate authority was directed to consider the appeal on merits without raising objections on the issue of limitation. The High Court emphasized that the distinction between concrete mix and RMC must be thoroughly examined, considering the manufacturing process and relevant CBIC notifications. The order was rendered in the peculiar facts and circumstances of the case and should not be treated as a precedent.