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2006 Supreme(Bom) 583
IN THE HIGH COURT OF BOMBAY
Kelkar Trading Corporation
Versus
Commissioner of Central Excise,mumbai
Decided on, APRIL 7, 2006
R. M. LODHA, J.
Headnote:Precedent - Two separate orders with difference of opinion - Matter referred to third member - This order found to be entirely different - Challenged - Third member violated his limits, he should have given decision referring decision in question of earlier members. - The order of third member shows that he entered the arena which was not the subject-matter of reference. He took the view which was not the view of either of the members of the Bench. The third member to whom the question was referred plainly overstepped the limits of his jurisdiction. He proceeded as if he was completely free in dealing with the reference and could opine on the point which was not the difference of opinion. He ought to have confined to the difference between the two members as was reflected in the question referred to him. The third member could not go beyond the question and he erred in taking a view different from both the members.
Central Excise and Salt Act, 1944 - Section 11-AC Central Excise Rules, 1944, Rule 173-Q Penalty imposed Appeal Reference to third member Altogether different view of third member Challenged Held Receiving opinion of third member disposal of appeal by Bench that appeal allowed as remanded is highly improper. Ramand not clarified.
( 2 ) THE following substantial questions of law arise in this appeal : 1) In view of the difference of opinion amongst two members of the bench, to the specific question referred to the third member, whether the third member could go beyond the question and take a view different from both the members of the bench who referred the question ? 2) Whether on the basis of the opinion of the third member, upon the matter being referred to the bench, the order of remand passed by the bench is ambiguous and equivocal ?
( 3 ) WE thought it fit to dispose of the appeal itself at this stage and we considered the matter accordingly.
( 4 ) THE show cause notice dated 30th September, 2001 was issued alleging therein that the appellants manufactured stators of sub-heading 8503. 00 by the process of riveting and cleating of chapter sub-heading 8312. 00 and had removed the said goods as second sale under the guise of trading of electrical motor Stampings without payment of duty. The appellants were asked to show cause; a) why the (goods stated to be) Stators of different sizes of value of Rs. 2,36,045. 00 and loose Electrical Stampings of different sizes of total value of Rs. 9,17,562. 00, seized under panchanama dated 5/6. 1. 2001, should not be confiscated under Rule 173-Q (1) of the Central Excise Rules, 1944; b) why the Central Excise duty amounting to Rs. 28,04,699. 00 leviable on Stators of total value of Rs. 5,54,50,195. 00 alleged to have been manufactured and cleared, during the period from 1. 7. 1996 to 4. 1. 2001 as detailed in Annexure B to the show cause notice, should not be demanded and recovered from us under sub-section (1) of Section 11a of the Central Excise Act, 1944 and the proviso thereto; c) why penalty should not be imposed, under Rule 173-Q of the Central excise Rules, 1944; d) why penalty equivalent to the amount of duty, should not be imposed, under section 11-AC of the Central Excise Act, 1944; e) why interest @ 24% per annum, should not be demanded and recovered, u/s. 11-AB of the Central Excise Act, 1944; and f) why an amount of Rs. 5,00,000. 00 (stated to have been voluntarily) deposited by TR-6 challan No. 0038/00-01/23/624/1 dated 11. 1. 2001 for Rs. 3,00,000. 00 and TR-6 challan no. 0038/00-01/23/633/1 dated 13. 1. 2001 for rs. 2,00,000. 00, towards the Central Excise duty, should not be appropriated against the duty amount demanded and/or fine and/or penalty imposed, if any,
( 5 ) THE appellants filed reply to the show cause notice on 30th September, 2001 and refuted the allegations. It was submitted that cleated and riveted stampings sold by them were not sold as stator as they require much more processes to become stators. Only because these are used in electric motors after stator processing would not make them stators or a part of electric motor. The electric stampings in riveted or cleated forms do not possess the property of stator nor these are capable of being used as stators in that stage as they have not been equipped with stator properties. In common parlance, these are known as cleated or riveted stampings and not complete stators.
( 6 ) THE Commissioner, Central Excise, Mumbai - V after hearing the appellants vide his order-in-original dated 27th February, 2002 / 4th march, 2002 confirmed the central excise duty of about Rs. 28,04,999/- and imposed penalty also to that extent under Section 11ac read with Rule 173q of central Excise Rules, 1944 in so far as the first appellant is concerned and imposed penalty of rs. 12,00,000/- against the appellant No. 2 under section 209a of the Central Excise Rules, 1944.
( 7 ) THE appellants preferred separate appeals against the order-in-original bearing Appeal nos. E/1199 and 1200/02 Mum.
( 8 ) THE aforesaid appeals came up for hearing before the bench comprising of Mr. Krishna Kumar, (Judicial Member) and Mr. S. S. Sekhon (Technical member )
