2018 (10) TMI 21 – BOMBAY HIGH COURT – TMI – Maintainability of appeal – Section 35G of CEA – Scope of SCN – Valuation – IC Engines and parts thereof which are captively consumed – Rule 6(b)(ii) of the erstwhile Central Excise (Valuation) Rules 1975 applied – Revenue objected on the ground Rule 6(b)(ii) of the Valuation Rules has not been properly applied, as various expenses which need to be included are not included to arrive at the cost of production of I.C. Engines and parts thereof – Revenue Neutrality.
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Held that:- The question of valuation though raised in the Appeal before it, was not examined by the Tribunal. This as the Appeal was allowed on account of Revenue neutrality making the question of appropriate valuation academic in the present facts – the impugned order does relate to the valuation of goods for the purposes of assessment.
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Hon'ble Supreme Court decision in Steel Authority of India Ltd. [2017 (4) TMI 881 – SUPREME COURT] has held that where an issue rela
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ality in the facts of this case.
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Maintainability of appeal – Held that:- When Section 35G of the Act very clearly excludes our jurisdiction in respect of the orders of the Tribunal relating to the rates of duty and the value of goods for the purposes of assessment, among other things, we cannot entertain an Appeal on the above issue on ground of perceived hardship.
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Appeal not maintainable in view of Section 35G of the Act – appeal dismissed as not maintainable. – CENTRAL EXCISE APPEAL NO. 6 OF 2018 Dated:- 19-9-2018 – M.S. SANKLECHA & RIYAZ I. CHAGLA, JJ. Mr. Pradeep S. Jetly with Mr. Sham V. Walve, for the Appellant. Mr. Prakash Shah with Ms. Divyesha Mathur & Mr. Viraaj Bhate i/by PDS Legal, for the Respondent. ORDER : 1. This Appeal under Section 35G of the Central Excise Act, 1944 (the Act) challenges the order dated 13th January 2017 passed by the Customs, Excise and Service Tax Appellate Tribunal (for short the Tribunal ). 2. The Appeal as filed by the Revenu
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facts of the case where there was larger question of evasion of duty through undervaluation and imposition of penalty and interest thereof? 3. However, at the hearing of this Appeal, Shri. Jetly, the learned Counsel appearing in support of the Appeal restricts the Appeal only to the question No. (c) above. 4. The impugned order dated 13 January 2013 of the Tribunal is a common order allowing the Respondents two Appeals. One filed by its Auto Division and the other by its Tractor Division. This Appeal of the Revenue is only against the order relating to Tractor Division of the Respondent. 5. The Respondent is a manufacturer of I.C. Engines and parts at its factory in Mumbai. These engines are being cleared to their units located in Nagpur and Rudrapur for use in the manufacture of tractors. At all times relevant to this Appeal i.e. November 1996 to March 2001, tractors are chargeable to excise duty. 6. The dispute in the present case is with regard to the appropriate valuation of the IC
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s of the I.C. Engines and parts thereof for payment of duty would be academic. This for the reason that the entire differential amount of the duty paid on I.C. Engines and parts thereof would be available as credit to the Respondent's tractor divisions at Nagpur and Rudrapur and utilized in payment of duty on tractors. Thus, the impugned order also records the fact that as it decides the Appeal on Revenue neutrality, the issue of valuation is not being visited by it. 9. On the aforesaid facts, we enquired of Shri. Jetly, the learned Counsel appearing for the Revenue as to whether this Appeal would at all be maintainable before this Court in view of Section 35G of the Act. This for the reason that the grievance of the Revenue in this Appeal is that the impugned order has not decided the issue of valuation, when the issue for its consideration was valuation of IC Engines and parts thereof. We also invited his attention to the decision of the Hon'ble Supreme Court in Steel Authori
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ich is a possible conclusion, the same must be allowed to rest even if this Court is inclined to take another view of the matter. (iv) The Tribunal had acted in gross violation of the procedure or principles of natural justice occasioning a failure of justice. 10. In response, Shri. Jetly the learned Counsel submits as under: (a) The impugned order of the Tribunal does not deal with the issue of valuation as it has only allowed the Respondent's Appeal on the issue of Revenue neutrality. The grievance of the Revenue is only to the extent that the order is in breach of principle of natural justice as the Tribunal has not dealt with the issue of valuation urged by the Revenue; (b) In case this Court concludes that there has been a breach of principle of natural justice in not deciding the issue of valuation, it would only restore/remand the issue of valuation to the Tribunal. It is only thereafter, when the Tribunal passes an order on remand that the question of valuation would arise
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erefore, in our view, the impugned order does relate to the valuation of goods for the purposes of assessment. This view of ours also finds support from paragraph 19 of the Hon'ble Supreme Court decision in Steel Authority of India Ltd. (supra) in the above case, it has been held that where an issue relating to valuation for purpose of assessment arises and the order is passed in breach of natural justice, then the Apex Court will admit the Appeal. 12. The submission that if this Appeal is admitted today then at the final hearing, if this Court holds that the issue of valuation has to be gone into it, the only order would be to remand the appeal to the Tribunal to decide the issue of valuation. This submission proceeds on the basis that the Appellate Authority while disposing of an Appeal which is in breach of principle of natural justice is only required to set aside the order and restore it to the Lower Authority for passing a fresh order. This submission is not based on provisio
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of the self evident position in law i.e. Section 130 and 130E of the Customs Act, 1962 that an Appeal relating to rate of duty and/or value of goods for purposes of assessment would only be before the Apex Court. In such circumstances, the Apex Court after recording that the sine qua non for the admission of Appeal before it is that the impugned order must relate to the rate of duty or determination of the value of goods for the purposes of assessment of duty. Therefore, not dealing with and/or deciding the issue of rate of duty and/or valuation for purposes of assessment would also be an order relating to rate of duty and/or valuation of goods. This finds support by its recording that an order in respect of valuation and/or rate of duty issues is passed in breach of natural justice, the same would be examined by the Hon'ble Supreme Court in an Appeal before it. In fact, the above decision supports the view that this Appeal is not maintainable before the High Court. An Appeal, if
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