The Commissioner of GST & Central Excise Versus M/s. Visaka Industries Ltd., M/s. Natesan Engineers & Contractors
Central Excise
2018 (12) TMI 1179 – MADRAS HIGH COURT – TMI
MADRAS HIGH COURT – HC
Dated:- 30-11-2018
Civil Miscellaneous Appeal Nos.2799 & 2800 of 2018 And CMP.No.21320 of 2018
Central Excise
Mr.Justice T.S. Sivagnanam And Mr.Justice N. Sathish Kumar
For the Appellant : Mr.Rajnish Pathiyil, SSC
For the Respondents : Mr.Raghavan Ramabadran
COMMON JUDGMENT
T.S.SIVAGNANAM, J.
These appeals filed by the Revenue under Section 35G of the Central Excise Act, 1944 (hereinafter called the Act) are directed against the common final order in Final Order Nos.40339 and 40340/2018 dated 06.2.2018 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai (for brevity, the Tribunal).
2. The above appeals are filed raising the following substantial questions of law :
“i. Has not the Tribunal fallen in error in ignoring the se
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issued a show cause notice dated 07.4.2008 to the respondent in CMA.No.2799 of 2018 namely the assessee – M/s.Visaka Industries Limited calling upon them to show cause as to why
(i) the Proviso to Section 11A of the Act should not be invoked to demand central excise duty by invoking the extended time limit;
(ii) the central excise duty amounting to Rs. 15,24,01,940/- and education cess of Rs. 13,55,237/-, totaling to Rs. 15,37,57,177/- should not be demanded from them under Section 11A of the Act;
(iii) interest at the appropriate rate under Section 11AB of the Act should not be demanded; and
(iv) penalty should not be demanded under Section 11AC of the Act.
5. In the same show cause notice, the respondent in CMA.No.2800 of 2018 namely M/s.Natesan Engineers and Contractors was directed to show cause to the Commissioner of Central Excise, Salem-1 as to why a personal penalty under Rule 26 of the Central Excise Rules, 2002 should not be imposed on them for their active involveme
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y documents to establish that they procured fly ash from other sources other than the quantity delivered to them as per the records of the Mettur Thermal Power Station (MTPS).
9. At this juncture, it may not be necessary for this Court to go into the other aspects of the matter.
10. Aggrieved by order passed by the Adjudicating Authority, the respondents herein filed appeals before the Tribunal. During the pendency of the appeals before the Tribunal, a miscellaneous application was filed by the assessee stating that they have documents to prove that they procured fly ash from open market during the periods 2003-04 and 2004-05. They also filed a paper book containing several documents and in addition to them, the assessee filed a Memorandum of Understanding (MOU) between the MTPS and four cement companies; a sample MOU between the MTPS and the assessee; sample documents pertaining to alleged incorrect lorry numbers; and a letter dated 17.2.2004 from the assessee to the MTPS. The asses
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Revenue, opined that the documents were required to be considered, but for such a purpose, the Tribunal remanded the matter to the Adjudicating Authority to reconsider the whole issue after giving sufficient opportunity to the assessee to furnish documents and a reasonable opportunity of hearing.
13. The question would be as to whether the Tribunal could have done so.
14. The Revenue is before us contending that there is a clear infraction of Rule 23 of the CESTAT Rules, that the Tribunal could not have remanded the matter for a fresh consideration, as the Adjudicating Authority specifically recorded a finding that no documents were produced despite the allegations being serious and that the Tribunal erred in remanding the matter to the Adjudicating Authority for a fresh consideration.
15. Furthermore, it is submitted by the Revenue that the Tribunal did not record any reasons as to why it was satisfied that those documents were required. According to the learned Senior Standing Cou
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mitted by the learned Senior Standing Counsel for the Revenue that this exercise of discretion by the Tribunal should have been done judiciously and not as done in the impugned order.
17. Per contra, the learned counsel for the respondents has reiterated the submissions made before the Tribunal and has drawn the attention of this Court to paragraph 3.1 of the order of the Tribunal wherein the Tribunal recorded that most of the documents were third party documents and that the assessee could not obtain them during the adjudication proceedings. He further submits that the Adjudicating Authority himself referred to whatever documents were given and this regard, has referred to paragraphs 23.01 and 23.02 of the Order-in-Original dated 06.5.2009.
18. We have carefully considered the contentions of the learned counsel on either side.
19. Rule 23 of the CESTAT Rules speaks of production of additional evidence, which reads as follows :
“Rule 23-Production of additional evidence:-
(1) Th
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produce any documents or to examine any witnesses or to adduce any evidence before any departmental authority, the authority shall comply with the directions of the Tribunal and after such compliance, send the documents, the record of the deposition of the witnesses or the record of evidence adduced, to the Tribunal.
(4) The Tribunal may, of its own motion, call for any documents or summon any witnesses on points at issue, if it considers necessary to meet the ends of justice.”
20. Sub-Rule (1) of Rule 23 of the CESTAT Rules states that the parties to the appeal shall not be entitled to produce any additional evidence either oral or documentary. But, if the Tribunal is of the opinion that any documents should be produced or any witness should be examined or any affidavit should be filed to enable it to pass orders or for any sufficient cause or if the Adjudicating Authority or Appellate or Revisional Authority has decided the case without giving sufficient opportunity to a party to
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the said submission of the learned counsel for the Revenue on account of the difference in the language employed in Order XLI Rule 27 of the CPC and Rule 23 of the CESTAT Rules. Rule 23 of the CESTAT Rules does not contain the conditions as contained in Order XLI Rule 27(a) and (aa) of the CPC.
23. In terms of the provisions and more particularly Order XLI Rule 27 of the CPC, the party seeking to produce additional evidence should establish that notwithstanding exercise of due diligence, he was unable to produce documents or the documents were not within his knowledge or after exercise of due diligence, they have been produced by him at the time when the decree appealed against was passed.
24. In Rule 23 of the CESTAT Rules, there appears to be a bar for the parties to the appeal to be entitled to produce additional documents.
However, the Tribunal is empowered to direct the documents to be produced and the circumstances, under which, the Tribunal can exercise powers, have been enum
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of fly ash from other sources. The explanation given by the assessee was that those were third party documents and therefore, they took some time to get those documents.
26. In paragraph 3.1 of the order passed by the Tribunal, this submission of the assessee was placed on record. That apart, with regard to the discrepancy in the vehicle numbers, the assessee produced certain records to show that an error had occurred. Similarly, we find that in paragraphs 23.01, 23.02(i), 23.02(x), 23.02(xvii), 23.02(xxiii), 23.02(xxv) and 23.02(xxvi), there were references to the stand taken by the assessee.
Therefore, in our considered view, the Tribunal was justified in remanding the matter to the Adjudicating Authority to consider the evidence, which may be produced by the assessee.
27. It goes without saying that if the Department doubts the authenticity of the documents, that aspect can also be gone into by the Adjudicating Authority, as there can be no bar in doing so. In our considered view
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