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TMI Blog2025 (3) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... COURT] and the job work done on the intermediate products as in the facts of the present case done by the petitioners and final product manufactured by the principal manufactures using such intermediate product.
In such circumstances, the CESTAT has rightly applied the decision in case of M/s. International Auto Ltd.(supra) and the matter was only remanded for the purpose of verification of the duty paid by the principal manufacturer on the final product including the intermediate goods upon which the job work was done by the petitioners.
Conclusion - The adjudicating authority's order was invalid due to non-compliance with CESTAT's directions. The case was remanded for de novo adjudication by a different officer, with specific instructions to verify the duty payment by the principal manufacturer as per CESTAT's mandate.
Petition disposed off. X X X X Extracts X X X X X X X X Extracts X X X X ..... ducts and clears the same on payment of central excise duty on the value of inputs used by the petitioners as well as the job work charges. The petitioners therefore, did not include the value of free pipes received on excise challan issued under Rule 4 (5) (a) of the Rules for discharge of the excise duty while returning the processed intermediate goods to the principal manufacturer. 9. The petitioners therefore, never availed the excise duty charged from the free issue material in form of Cenvat Credit. The petitioners availed the Cenvat Credit of excise duty charged on the own inputs used during the job work activity only which was included in the value for discharge of excise duty at the time of removal of the processed intermediate goods back to the principal manufacturers. 10. A show cause notice dated 06.05.2016 was issued after investigation made by the respondents invoking an extended period of limitation proposing to demand central excise duty under section 11A (4) of the Act on the value of free issue material supplied by the principal manufacturers for the manufacture of the intermediate goods on job work basis along with interest and penalty for the clearance made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al merely because it undertook the job work on the said material which was used by the principal manufacturer to manufacture the final product which was cleared as a dutiable product including free supply of material sent to the petitioners for job work. 15. It is shocking and surprising that inspite of the directions issued by CESTAT, respondent Commissioner of CGST & CE, Vadodara-II keeping aside all the norms of judicial propriety and judicial hierarchy has fortitude to observe in the impugned order as under: "In my humble appreciation of facts of the case, I am of the opinion that Hon'ble Tribunal failed to take cognizance of the Apex Court's Judgment in UJAGAR Prints case from where the stream of judicial discipline follows. That without prejudice, I am of bonafide belief to hold independent view considering that the findings of the Commissioner were founded on the premise that the value of goods cleared by the assessee qua Job worker was included in the value of final goods cleared from the factory premises of the principal manufacturer as against the judgments of the Hon'ble Supreme Court of India in the case of UJAGAR Prints as well as Pawan Biscuits. That pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n conjoint reading of the above, it is clear that the respondent in utter disregard to the directions issued by CESTAT ventured to adjudicate the show cause notice contrary to the directions issued by the CESTAT to verify as to whether the principal manufacturer has adjusted the duty while clearing the final product in absence of such facts on record so as to apply the ratio of decision of Hon'ble Apex Court rendered in case of M/s. International Auto Ltd. (supra). 18. Respondent was therefore, only required to verify that whether the principal manufacturer has paid the duty on the total value of final product including the value of material supplied by the principal manufacturer to the petitioners for job work in the facts of the case. However, the respondent for reasons best known to him has tried to overreach the directions issued by the CESTAT. 19. We are therefore, of the opinion that impugned order-in-original is without jurisdiction, contrary to the directions issued by the CESTAT. 20. In similar situation, Hon'ble Supreme Court in case of Bhopal Sugar Industries Ltd. v. Income Tax Officer, Bhopal reported in (1960) 49 ITR 618, had held as under: "In these circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way. As a matter of fact the Commissioner of Income-tax had made an application for a reference, which application was subsequently withdrawn. The Judicial Commissioner was not sitting in appeal over the Tribunal and we do not think that in the circumstances of this case it was open to him to say that the order of the Tribunal was wrong and, therefore, there was no injustice in disregarding that order. As we have said earlier, such view is destructive of one of the basic principles of the administration of justice." 21. Learned advocate Mr. Desai for the petitioners has also referred to and relied upon the decision of Apex Court in case of Union of India and others v. Kamlakshi Finance Corporation Ltd. reported in 1992 Supp (1) Supreme Court Cases 648 wherein in similar situation the Hon'ble Bombay High Court quashed the orders of the Assistant Collector and directed the department to allocate the matter to the competent officer to pass an order after passing severe strictures against the two Assistant Collectors who had dealt with the matter. The Union of India being aggrieved by the strictures passed by the High Court preferred SLP before the Hon'ble Apex Court and learned Addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assistant Collector that, if he accepted the assessee's contention, the department would lose revenue and would also have no remedy to have the matter rectified is also incorrect. Section 35-E confers adequate powers on the department in this regard. Under Sub-section (1), where the Central Board of Direct Taxes come across any order passed by the Collector of Central Excise with the legality or propriety of which it is not satisfied, it can direct the Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order. Under Sub-section(2) the Collector of Central Excise, when he comes across any order passed by an authority subordinate to him, if not satisfied with this legality or propriety, may direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order and there is a further right of appeal to the department. The position now, therefore, is that, if any order passed by an Assistant Collector or Collector is adverse to the interests of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied by the end user which were the facts before the Hon'ble Apex Court in case of Ujagar Prints and others v. Union of India and others reported in (1989) 3 Supreme Court Cases 488 and the job work done on the intermediate products as in the facts of the present case done by the petitioners and final product manufactured by the principal manufactures using such intermediate product. 23. In such circumstances, the CESTAT has rightly applied the decision in case of M/s. International Auto Ltd.(supra) and the matter was only remanded for the purpose of verification of the duty paid by the principal manufacturer on the final product including the intermediate goods upon which the job work was done by the petitioners. 24. In such circumstances, the impugned order passed by the respondent is hereby quashed and set aside and a token cost of Rs. 1000/- is imposed upon the respondent for not following the directions issued by CESTAT. 25. It is clarified that we have not gone into the merits of the matter and matter is remanded for allocating the same to another officer to pass a fresh de novo order within a period of 12 weeks from the date of receipt of a copy of this order so as to com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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