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2009 Supreme(P&H) 1304
PUNJAB & HARYANA HIGH COURT
M.M.Kumar and Jaswant Singh JJ.
Commissioner Of Central Excise, Panchkula
Versus
Special Machine
CEA No. 48 of 2005,
Decided On : AUGUST 3, 2009
The main legal point established in the judgment is that the determination of questions relating to the rate of duty of excise falls under the jurisdiction of the Supreme Court, and appeals on such matters should be filed before the Supreme Court under Section 35L of the Act.
Headnote:
Central Excise Act - Central Excise - 35G - 35G of the Central Excise Act, 1944 - The judgment discusses the Central Excise Act, 1944, and the Central Excise Tariff Act, 1985, including Sections 9(1), 173B, 173C, 173F, 173G, and Notification No. 175/86. The court analyzed the contravention of provisions and willful suppression of material information by the respondent, leading to the imposition of duty, interest, and penalty.
Fact of the Case:
The case involved the contravention of provisions of the Central Excise Rules, 1944, and willful suppression of material information by the respondent, leading to the imposition of duty, interest, and penalty. The Tribunal allowed the appeal of the respondent, which was challenged in the instant appeal.
Finding of the Court:
The court found merit in the preliminary objections raised by the assessee-respondent regarding the maintainability of the appeal, citing similar controversies and relevant case law. It held that the present appeals are not maintainable, and the only remedy available to the revenue is to file an appeal before the Supreme Court.
Issues: The issues involved the maintainability of the appeal, interpretation of exemption notifications, and determination of the rate of Central Excise duty payable/leviable on excisable goods manufactured by the respondent.
Ratio Decidendi: The court's decision was based on the determination that the substantial questions of law raised in the appeals related to the rate of duty of excise, and therefore, the remedy of appeal lies with the Supreme Court under Section 35L of the Act.
Final Decision: The court directed the Registry to return the appeals to be presented before the appropriate Court of competent jurisdiction, as the present appeals were found to be not maintainable.
M.M.Kumar, J.
1. This order shall dispose of C.E.A. Nos. 48 and 120 of 2005 as common questions of law and facts are involved. These appeals have been tiled by the revenue under Section 35G of the Central Excise Act, 1944 (for brevity, #28;the Act#25;) challenging order dated 28-4-2004 [2004 (169) ELT 215 (Tri. - Del.)] and order dated 2-12-2004, passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for brevity, #24;the Tribunal) in respective cases. The facts are being referred from C.E.A. No. 48 of 2005.
2. Brief facts of the case are that M/s. Special Machiners-respondent was having three separate Units in Karnal and engaged in the manufacture of welding electrodes, plants & machinery and flux, falling under Chapters 83, 84, 85, 38 and 29 of the Schedule attached to the Central Excise Tariff Act, 1985 (for brevity, #24;the Tariff Act#25;). It was also holding L4 Licences for manufacturing of said products. M/s. Industrial Products, M/s. Modern Equipments and M/s. S.M. Welding Electrodes (P) Ltd., all situated at Karnal, are also licensed/registered with the department and engaged in the manufacture of welding electrodes. M/s. Perfect Industries. Karnal. was a declarant.
3. On 6-3-1992, the Central Excise Preventive Officers of Delhi visited two premises of the respondent as well as units belonging to M/s. Industrial Products, M/s. Modern Equipments and M/s. S.M. Welding Electrodes (P) Ltd. and M/s. Perfect Industries and some quantity of welding electrodes and pacing material etc. were seized. Later on it was detected that some of the material was unaccounted and did not tally with the records. On 6-3-1992 itself, the statement of Shri Vitap Jain, Chief Executive of the respondent was recorded who admitted that he was also the authorised signatory of M/s. Industrial Products, M/s. S.M. Welding Electrodes (P) Ltd. and M/s. Modern Equipments. The statements of various employees working in the aforementioned industrial units were also recorded under Section 14 of the Act. On 23-3-1992, the statement of Shri R.M. Jain, Proprietor of the respondent as well as Shri Vipin Jain, Accounts Assistant of the respondent was recorded. Summons were issued to Shri R.M. Jain to appear on 22-5-1992, 22-6-1992 and 10-7-1992 but he failed to appear on one pretext or the other. After recording the statements and analyzing the same it was found that Shri R.M. Jain, Proprietor of the respondent was providing readymade coating material to different units, which is an essential ingredient required for the manufacture of welding electrodes, through his other concern, namely, M/s. Perfect Industries. However, no stock register was being maintained but only invoices were raised. It was also found that Modern Equipments and S.M. Welding Electrodes were manufacturing some of the brands owned by the respondent under royalty agreement.
4. It was further found by the department that the aforementioned different units were also lacking basic infrastructural facilities which were required for carrying on independent functioning. The production staff of all the units was common and the office work was being performed by the staff of the respondent. On the pretext of research and development (R&D), in the R&D Laboratory of the respondent the work of quality control of finished welding electrodes was being performed. It was also noticed that during 1987-88 and 1988-89 the respondent was not entitled for the benefit of Notification No. 175/86, dated 1-3-1986, on the goods valuing more than Rs. 1.5 crores which were cleared during 1986-87 and 1987-88. It was, thus, found that the respondent has contravened the provisions of Rules 9(1), 173B, 173C, 173F. 173G of the Central Excise Rules, 1944 (for brevity, #24;the Rules#25;) as well as Notification No. 175/86, dated 1-3-1986, and willfully suppressed the material information with an intention to evade payment of duty. Accordingly, a show cause notice was issued to the respondent as t
