2022 (12) TMI 903 - AT - Central Excise

Conformity of the findings of the lower authorities with the terms of remand - proposal of central excise authorities to include 2 nos. cold rolling machines, claimed by the appellant to be standby and functionally inoperable, in assessment under compounded levy scheme , in pursuance of rule 96 ZA - ZV of Central Excise Rules, 1944 along with notification no. 109/94-CE (NT) dated 13th May 1994 - HELD THAT - The findings of the first appellate authority appears to be rhetorical with intent to eliminate improbability coupled with mere restatement of observation of the Tribunal for adoption of conclusion that is vague. That is not consistent with the specific aspect highlighted in the order of remand requiring ascertainment of the claim of the appellant that the machines were, in fact, non-functional. This the lower authorities have failed to do. As the order of remand has not been complied with, it would be only fit and proper for the impugned order to be set-aside. Appeal allowed.

Summary

Issues:
Conformity of findings with terms of remand in the assessment of differential duty under compounded levy scheme for 'cold rolling machines' claimed as standby and functionally inoperable.

Analysis:
The appeal involved a dispute regarding the assessment of differential duty under the compounded levy scheme for 'cold rolling machines' by central excise authorities. The appellant claimed that the machines were standby and functionally inoperable, thus not liable for duty. The lower authorities found that the appellant had failed to comply with statutory declarations and had suppressed material facts, leading to evasion of duty. The first appellate authority upheld the order, emphasizing the inconsistency in the appellant's claims regarding the non-functional machines purchased as standby. The burden of proof was on the appellant to show non-utilization of the machines. The appellant's plea to waive the penalty was rejected due to evasion of duty through mis-declaration.

The terms of remand required a reconsideration of the appellant's claim that the machines were non-functional and not in use. The remit was specific to the burden of proof on the appellant regarding the non-utilization of the machines. The impugned order was set aside, and the case was remanded for fresh consideration by the Commissioner (Appeals). The visit to the premises revealed three machines, with the appellant asserting that two were standby and not used in manufacturing. The plea required reconsideration by the Commissioner (Appeals) as per the Member (Technical)'s observation.

The findings of the first appellate authority were criticized for being rhetorical and failing to address the specific aspect highlighted in the order of remand. The lower authorities did not ascertain the claim of the appellant regarding the non-functionality of the machines. As the order of remand was not complied with, the appeal was allowed, and the impugned order was set aside. The judgment emphasized the importance of adhering to the terms of remand and conducting a thorough assessment based on the specific issues raised by the appellant.