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TMI Blog2008 (6) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... red to as 'the Company'); CEA No. 3 of 2006 is preferred by Sri Rudra Shanker, Managing Director of the Company; CEA No. 4 of 2006 is preferred by Sri Rudra Sridhar, Director of the Company; CEA No. 6 of 2006 is preferred by Sri K.B. Vijay Kumar, Managing Partner of M/s. Vandana Enterprises questioning the common order in Appeal Nos. E/1342-1346 of 2004 dated 30-11-2005 on the file of the Customs, Excise Service Tax Appellate Tribunal, South Zonal Bench at Bangalore (CESTAT). W.P. No. 27052 of 2007 also is filed by the Company seeking a direction to the Commissioner of Customs Central Excise, Hyderabad-III Commissionerate, Hyderabad (2nd respondent) and to the Superintendent of Central Excise, Nacharam-I Range, Hyderabad (3rd respondent) and their subordinates not to take any coercive steps for realization of the amount demanded under Notice in OC. No. 1093 of 2007 dated 26-11-2007 issued by the 3rd respondent asking the Company to clear the central excise dues to a tune of Rs. 4,27,23,256/-. 3. The undisputed facts in these cases are the Company, which is registered as a small scale industry, is carrying on business in manufacture and sale of Synthetic Enamel/Acrylic Emulsio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally for their participation in the clandestine clearances of excisable stock worth Rs. 20,68,70,399/- during the period, 1999-2000 to 2002-2003 stating that the difference in duty payable on the goods clandestinely removed would work out to Rs. 2,83,04,863/-, after adjusting the duty already paid. Thereafter, another show cause notice OR No. 13/2004 dated 31-3-2004 under Section 11A of the Act was issued to them alleging that inasmuch as the clearances made by them during the pendency of the proceedings covered by the earlier show cause notice exceeded Rs. 3 Crores, the Company which paid duty at concessional rate is liable to pay additional duty of Rs. 6,39,955/- and as to why penalties etc. mentioned therein should not be imposed. To those show cause notices the Company and the other appellants sent detailed replies indicating as to how they cannot be subjected to any of the actions proposed and sought an opportunity of being heard. After considering the replies to the show cause notices and the contentions of the appellants, the Commissioner of Customs Central Excise vide his order dated 22-9-2004 in OR No. 170/2003/Hyd.III/Adjn and OR No. 13/2004/Hyd.III/Adjn, passed an orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Rudra Shankar, Managing Director of the Company, under Rule 209A of the erstwhile Central Excise Rules, 1944 and Rule 26 of the Central Excise (No. 2) Rules, 2001 and Rule 26 of the Central Excise Rules, 2002 and a penalty of Rs. 5,00,000/- on Sri Rudra Sridhar, Director of the Company; Sri K.B. Vijay Kumar, Managing Partner of M/s. Vandana Enterprises; and Sri V. Radha Krishna, Former Proprietor of M/s. Anuradha Agency, Vijayawada, under Rule 209A of the erstwhile Central Excise Rules, 1944 and Rule 26 of Central Excise (No. 2) Rules, 2001 and Rule 26 of Central Excise Rules, 2002. In respect of the second show cause notice OR No. 13/2004 dated 31-3-2004, he directed payment of Rs. 6,39,955/- short paid by mis-utilizing the concessional rate of duty under Notification No. 9/2003 dated 1-3-2003 for the period of April 2003 to September 2003, under Section 11A of the Act and interest thereon under Section 11AB equivalent to the duty was demanded and imposed penalty of Rs. 2,00,000/- under Rule 27 of the Central Excise Rules, 2002. Questioning the said order, the Company, Sri Rudra Sridhar, Sri V. Radha Krishna, Sri Rudra Shankar and Sri K.B. Vijay Kumar preferred Appeal Nos. E/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal against the order of CESTAT impugned in CEA No. 2 of 2006 lies to this Court only but not to the apex Court and in any event since CEA Nos. 3, 4 and 6 of 2006 are in relation to penalties imposed by the adjudicating authority which is confirmed by the CESTAT, question of filing an appeal to the Supreme Court against the order of CESTAT as per Section 35L of the Act does not arise because circulars issued by Central Board of Excise and Customs show that appeals against such orders have to be filed in the High Court only and those circulars are binding on the Central Excise officials. He relied on Commissioner of Customs v. Indian Oil Corpn. Ltd. - 2004 (165) E.L.T. 257 (S.C.) = (2004) 3 SSC 488 at 497 where in it was held :- "(1) Although a circular is not binding on a court or an assessee, it is not open to the Revenue to raise a contention that is contrary to a binding circular by the Board. When a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute. (2) Despite the decision of this Court, the Department cannot be permitted to take a stand contrary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal only after hearing the arguments of both sides and give its reasons for accepting or rejecting the submissions made His next contention is that inasmuch as the show cause notices in this case were issued without the prior approval of the Chief Commissioner of Central Excise they are not sustainable and contended though such a ground was taken before CESTAT it failed to consider the said question and give a finding thereon. He relied on Pahwa Chemicals (P) Limited v. Commissioner of Central Excise - 2005 (181) E.L.T. 339 (S.C.) = (2005) 2 SCC 720, S.L. Srinivasa Jute Twine Mills (P) Ltd. v. Union of India - (2006) 2 SCC 740, Gammon India Ltd. v. Special Chief Secretary - (2006) 3 SCC 354, Commissioner of Income Tax v. Dhadi Sahu - 1994 Supp (1) SCC 257, Commissioner of Income Tax v. R. Sharadamma - (1996) 8 SCC 388, Kolhapur Canesugar Works Ltd. v. Union of India - 2000 AIR SCW 364 and Bhuna Coop. Sugar Mills Ltd. v. Commissioner of Income Tax - (2005) 2 SCC 728 in support of his contention that in spite of deletion of the second and third provisos to Section 11A of the Act, as the assessment relates to the period during which those provisos were in the statute book the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suppression, fraud or mis-representation relating to the alleged manufacture of the finished products it cannot take the benefit of the extended period of limitation and relied on Collector of Central Excise, Kanpur v. U.P. Lamination - 1997 (89) E.L.T. 440 (S.C.) = (1997) 10 SCC 175 and Collector of Central Excise, Indore v. Oil Natural Gas Commission - 1998 (103) E.L.T. 3 (S.C.), Collector of Central Excise v. Chemphar Drugs Liniments - 1989 (40) E.L.T. 276 (S.C.) and Essvee Polymers (P) Ltd. v. Commissioner of Central Excise, Chennai - 2004 (165) E.L.T. 291 (Tri. - Chennai), Commissioner of Central Excise v. Supreme Fire Works Factory - 2004 (163) E.L.T. 510 (Tri. - Chennai), Commissioner of Central Excise v. Murugan Enterprises - 2003 (162) E.L.T. 233 (Tri. - Chennai), Thiruchengode Velavar Spinning Mills Pvt. Ltd. v. C.C.E., Coimbatore - 2003 (155) E.L.T. 159 (Tri. - Chennai) and Beaver Engineering Corpn. v. Commissioner of Central Excise - 2002 (148) E.L.T. 1102 (Tri. - Chennai) in support of the said contention. His next contention is that the failure of the adjudicating authority to adhere to the principles of natural justice and give an opportunity to the appellants to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 100 of the Code of Civil Procedure, High court cannot interfere with concurrent findings of facts of the courts below without insufficient and just reasons. (See Sayeda Akhtar v. Abdul Ahad [(2003) 7 SCC 52]). In second appeal, High Court is also not entitled to set aside concurrent findings of fact by giving its own findings contrary to the evidence on record. (See Saraswathi v. S. Ganapathy [(2001) 4 SCC 694])." Relying on the observations in Viveka Nand Sethi v. Chairman, J K Bank Ltd. - (2005) 5 SCC 337 at 345 reading : "The principles of natural justice, it is trite, is no unruly horse. When facts are admitted, an enquiry would be an empty formality. Even the principle of estoppel will apply, (see Gurjeewan Garewal (Dr.) v. Dr. Sumitra Dash [(2004) 5 SCC 263]) The principles of natural justice are required to be complied with having regard to the fact situation obtaining therein. It cannot be put in a straitjacket formula. It cannot be applied in a vacuum without reference to the relevant facts and circumstances of the case. (see State of Punjab v. Jagir Singh [(2004) 8 SCC 129] and Karnataka SRTC v. S.G. Kotturappa [(2005) 3 SCC 409])" he contended that since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd had been wrongly adjudicated by the Deputy Commissioner in excess of powers vested in him by the Central Board of Excise and Customs, and remitted the matter with certain directions. Being aggrieved by the directions given by the Commissioner of Central Excise (Appeals) the appellants therein filed an appeal to CEGAT, which through its order dated 19-7-2001, held that the Commissioner (Appeals) erred in remitting the matter with directions, and directed the Commissioner (Appeals) to decide the case on its merits. Questioning that order, further appeal was preferred to the Supreme Court. As no stay was granted by the apex Court, the Commissioner (Appeals) adjudicated the case on 17-10-2002 and confirmed the demand. The appellants therein questioned that order in CEGAT taking a plea that the Superintendent had no jurisdiction to issue show-cause notices and the Deputy Commissioner had no jurisdiction to adjudicate. By its order dated 25-6-2003 CEGAT dismissed the said appeal. Questioning the said order of CEGAT an appeal was preferred to the apex Court. The apex Court, which heard both the appeals together, held that inasmuch as Section 11A of the Act was amended and the word "Col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute book, the show cause notice issued without the approval of the Chief Commissioner of Central Excise after their deletion from the statute book would not effect their validity. As the second and third provisos to Section 11A of the Act stood deleted with effect from 14-5-2003, by virtue of the Act 32 of 2003, from the wording of Section 11A of the Act, it is clear that from 15-5-2003 onwards any officer of the Central Excise can issue the show cause notice and take further action as contemplated by that Section. The first show cause notice in this case, which is dated 25-9-2003, was issued by the Commissioner of Customs and Central Excise, Hyderabad-III Commissionerate, Hyderabad. Section 2(b) of the Act defines, "Central Excise Officer" as "the Chief Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Joint Commissioner of Central Excise, Deputy Commissioner of Central Excise, Assistant Commissioner of Central Excise or any other officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central Board of Excise and Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e new provision." So, the said decision, in fact, negatives the contention of the learned counsel for the Company. 10. After carefully considering the contentions raised by the learned counsel for appellants and the learned Assistant Solicitor General, we are of the clear opinion that an appeal against the order of CESTAT lies only to the apex Court under Section 35L of the Act but not to this Court because the first show cause notice is issued to the Company inter alia to explain why "(i) The benefits of exemption/concessional rate of duty under SSI Notification Nos. 9/2000-C.E., dated 1-3-2000, 9/2001-C.E., dated 1-3-2001, 9/2002-C.E., dated 1-3-2002, should not be denied to them inasmuch as their value of clearances has cross the limit of Rs. 300 lakhs prescribed under the said notifications during the years 1999-2000, 2000-01, 2001-02, 2002-03. (ii) An amount of Rs. 2,83,04,863.00 (Rupees two crores eighty three lakhs four thousand eight hundred sixty three only) being the Central Excise duty evaded by them on the clandestine clearances and the differential duty arisen out the mis-utilisation of SSI Notifications mentioned supra for the period from 1-4-1999 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) strongly relied on by the learned counsel for Company, because they are all decisions rendered by Tribunals but not by any High Courts or the apex Court. 12. The contention that CEA Nos. 3, 4 and 6 of 2006 filed questioning the levy of penalty are maintainable in this Court has no force because the question of payment of penalty arises only when there is evasion of duty. For considering the question whether the appellants in these appeals are liable to pay the penalties and other sums levied against them or not, the validity of the finding that there is an evasion of duty has to be considered and decided. As that question cannot be considered and decided in this Court, these appeals are also not maintainable in this Court. 13. In view of the conclusion reached by us regarding the maintainability of these appeals, we do not wish to consider the other contentions raised by the learned counsel for the Company as any finding given by us would not be binding on anybody for want of jurisdiction. 14. As no writ can be issued restraining the officers, who are bound to enforce the orders of adjudicating authority and CESTAT, from enforcing the orders of the Adjudicating Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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