Point of Law: When Tribunal has set aside the order to the extent of clandestine removal without giving any reasoning and ignoring the submissions of the department with regard to facts and evidence on record.

JUDGMENT :

R.D. DHANUKA, J.

1. The Division Bench of this Court at Mumbai by its order dated 2nd November, 2018 passed in this appeal found it difficult to reconcile the conflict of views of this Court in APM Terminals India Pvt. Ltd. vs. Commissioner of Central Excise, Navi Mumbai and Another, 2019 (21) G.S.T.L. 26 in Central Excise Appeal No. 124 of 2017 delivered on 6th September, 2018 and the judgment delivered by Division Bench of this Court in case of Facor Steels Ltd. vs. Commissioner, 2015 (320) E.L.T. 357 (Bom.) and formulated two questions for consideration by Larger Bench, which Larger Bench is accordingly constituted pursuant to the Administrative Order passed by the learned Chief Justice in view of the said order dated 6th September, 2018. The Division Bench has referred following questions of law to the Full Bench:

(i) Whether on the facts and circumstances of the case and in law, the issue of a demand being time barred when it is made on the basis of valuation and/or rate of duty, is an issue relating to the assessment of goods and, therefore, an appeal under Section 35G of the Act, is not maintainable before this Court?

(ii) Whether an appeal under Section 35G(1) of the Act would be maintainable before this Court when there is no dispute with regard to the rate of duty and/or valuation as arrived at by the Tribunal (both parties accept the decision of the Tribunal on that issue) and challenge the impugned order only to the extent of the demand being barred by limitation?

2. It would be appropriate to set out few facts for better appreciation of the dispute involved herein and for the purpose of answering the questions of law involved and referred to the Full Bench for determination.

3. The respondent has an Oil Terminal where they inter-alia received non-duty paid Superior Kerosene Oil (SKO) from their Mahul, Mumbai refinery and cleared the said product falling under Chapter 27 of the Central Excise Tariff on payment of duty to Public Distribution System (PDS) dealers and to other Oil Marketing Companies.

4. According to the appellant-revenue, the respondent had cleared SKO to Oil Marketing Companies and in respect of those clearances to the said Oil Marketing Companies, paid Central Excise Duty on value which is allegedly lesser than the transaction value, actually recovered by them from the other Oil Marketing Companies. The revenue accordingly called for the details from the respondent vide letter dated 8th September, 2005. The respondent furnished details of the transactions vide letter dated 21st September, 2005. According to the revenue, the Central Excise Duty on an assessable value was much less than the transaction value actually recovered from the Oil Marketing Companies in contravention of the provisions of Section 4(1)(a) of the Central Excise Act, 1944 (for short ‘the said Act’).

5. According to the revenue, the differential duty payable by the respondent on account of higher realization of their value from their customers for the period from 1st September, 2000 to 6th September, 2004 was worked out as Rs. 3,64,29,967/-. According to the revenue, the respondent had intentionally with the sole purpose of evading payment of Central Excise Duty willfully mis-declared the value of the SKO cleared by them to the other Oil Marketing Companies, which was much less than the actual value recovered from the Oil Marketing Companies. According to revenue, the respondent suppressed the actual value realised by not declaring the same to the Department and contravened the provisions of Section 4 of the said Act, read with Rule 9, 49, 173G and Rules 173F of the erstwhile Central Excise Rules, 1944 and Rules 4, 6 and 8 of the Central Excise Rules, 2001/2002.

6. Revenue accordingly issued show-cause notice upon the respondent as to why the Central Excise Duty/CENVAT duty amounting to Rs. 3,64,29,967/- should not be demanded and recovered from them under the proviso to Section 11A(1) of the said Act and also as to why penalty