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of <h1>High Court affirms Tribunal decisions on Section 35C(2)</h1> <h3>COMMISSIONER OF CENTRAL EXCISE, PUNE-III Versus GE MEDICAL SYSTEMS</h3> COMMISSIONER OF CENTRAL EXCISE, PUNE-III Versus GE MEDICAL SYSTEMS - 2012 (280) E.L.T. 33 (Kar.), 2013 (29) S.T.R. 327 (Kar.) Issues Involved:1. Interpretation of Section 35C(2) regarding the period for filing a Rectification of Mistake (ROM) application.2. Consistency in CESTAT's decisions regarding the six-month period for filing ROM.3. Whether the demand is hit by time-bar and the issue of classification of spares of x-ray machines and Mobile Image Intensifiers (MII).4. Maintainability of appeals under Section 35G concerning rate of duty or classification.5. Justification of penalty levied under Rule 209A of the Central Excise Rules, 1944.Detailed Analysis:1. Interpretation of Section 35C(2) regarding the period for filing a Rectification of Mistake (ROM) application:The Central Excise Department's appeals questioned the legal sustainability of the CESTAT's order, particularly its interpretation of Section 35C(2). The Tribunal dismissed the ROM application as it was filed beyond the six-month period stipulated by Section 35C(2). The Department argued that the final order dated 16-11-2006 was received on 22-1-2007, and the ROM application was filed on 5-6-2007, thus within the permissible period. However, the Tribunal's decision was upheld, citing the statutory limitation of six months as conclusive.2. Consistency in CESTAT's decisions regarding the six-month period for filing ROM:The Department highlighted an inconsistency in the CESTAT's decisions, noting that in a different case (M/s. Wipro Ltd. v. Commissioner of Customs, Bangalore), the Tribunal allowed a ROM application filed after six months. Despite this, the High Court found no error in the Tribunal's adherence to the six-month limitation in the present case, affirming the Tribunal's dismissal of the ROM application.3. Whether the demand is hit by time-bar and the issue of classification of spares of x-ray machines and Mobile Image Intensifiers (MII):The Tribunal had allowed the Assessee's appeal on the grounds that the demand was hit by time-bar, without addressing the classification of spares of x-ray machines and MIIs. The Department contended that suppression and willful misstatement were involved, justifying the extended period for demand. The High Court noted that the Tribunal's order lacked a specific finding on the classification issue, which is crucial for determining the rate of duty.4. Maintainability of appeals under Section 35G concerning rate of duty or classification:The Assessee's counsel raised a preliminary objection regarding the maintainability of the appeals under Section 35G, arguing that issues relating to the rate of duty or classification should be appealed directly to the Supreme Court under Section 35L. The High Court upheld this objection, stating that disputes over tariff classification and duty rates fall outside the High Court's jurisdiction under Section 35G. Consequently, the appeals were dismissed in limine, directing the Revenue to seek recourse in accordance with statutory provisions before the Supreme Court.5. Justification of penalty levied under Rule 209A of the Central Excise Rules, 1944:The Department also appealed against the Tribunal's order setting aside the penalty imposed on the Assessee's officer. The High Court observed that the penalty is a consequential action linked to the determination of duty. As the Tribunal had set aside the additional duty, the penalty automatically became unsustainable. The High Court dismissed the appeal, noting that the Revenue could seek revival of the penalty order if they succeeded on the main matter in the appropriate forum.Conclusion:The High Court dismissed the appeals, affirming the Tribunal's decisions. It held that issues relating to tariff classification and duty rates should be appealed to the Supreme Court, and the six-month limitation for filing ROM applications is binding. The penalty issue was deemed consequential to the duty determination, and the appeals were dismissed with the observation that the Revenue could pursue the matter in the appropriate forum.
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