2013 (9) TMI 24 - HC - Central Excise

Court rejects review applications, upholds Adjudicating Authority's decision. No legal errors found.

The review applications were rejected as the Court found no error apparent on the face of the record. The Court upheld the findings of the Adjudicating ... Review of the earlier decision - whether judgment dated 8.3.2013 [2013 (3) TMI 365 - ALLAHABAD HIGH COURT] suffers from any error apparent on the face of the record wherein the issue was decided against the assessee - CENVAT credit - Held that:- It is apparent that on findings recorded by the Commissioner the question of levy of penalty was neither raised nor decided by CESTAT and thus it was found that no substantial question of law arises for consideration. The second issue regarding the denial of CENVAT Credit on the capital goods, which was fully exempt from central excise duty, was neither raised nor decided by the CESTAT. The counsel appearing for the appellants had raised the issue. The question, however, was not considered as it was neither raised nor decided by the CESTAT. In appeal under Section 35G of the Central Excise Act, 1944, the appellant is permitted to raise only such ground, which was raised and decided by the CESTAT. Since the question was neither raised and decided by the CESTAT, it was not considered by the Court while deciding and dismissing the appeals. We do not find that the judgment suffers from any error apparent on the face of the record. The grounds quoted as above to review the judgment were argued by learned counsel for the appellant and were considered in the judgment dated 8.3.2013 [2013 (3) TMI 365 - ALLAHABAD HIGH COURT], in which we held that the questions raised in the appeals are questions of fact and that there was no substantial question of law to be considered in the appeals. - Decided against the assessee. Issues Involved:1. Error apparent on the face of the record.2. Consideration of documents and evidence regarding the use of inputs in the fabrication of capital goods.3. Perversity in the findings of the authorities.4. Applicability of Explanation 2 to Rule 2(k) of the CENVAT Credit Rules, 2004.5. Levy of penalty under Section 11AC of the Central Excise Act, 1944.6. Denial of CENVAT Credit on capital goods exempt from central excise duty.Detailed Analysis:1. Error Apparent on the Face of the Record:The applicants argued that the High Court did not deal with the second issue and dismissed the entire appeal, resulting in an error apparent on the record. However, the Court found that the grounds for review were already argued and considered in the judgment dated 8.3.2013. The Court held that the questions raised were questions of fact and no substantial question of law was present.2. Consideration of Documents and Evidence:The applicants contended that the Court failed to consider documents establishing the extent of inputs used in the fabrication of capital goods. They produced charts and documents to show the usage of inputs. However, the Court found that the CESTAT recorded findings of fact that there was no column in ER-1 for recording details of inputs for capital goods manufacture, and no instruction or circular mandated maintaining such documents. The Court held that the findings of the Adjudicating Authority and the Tribunal were not erroneous.3. Perversity in the Findings of the Authorities:The applicants claimed that the authorities' findings were perverse as they did not deal with the inputs individually and disallowed CENVAT credit without examining evidence. The Court found that the Tribunal's findings about non-filing of specified details and evidence were not perverse. The appellants failed to provide necessary details to the department, and the jurisdictional Central Excise Officers could not verify the claims due to the lack of material.4. Applicability of Explanation 2 to Rule 2(k) of the CENVAT Credit Rules, 2004:The applicants argued that the Court and CESTAT quoted the wrong provisions of the statute, applying an explanation inserted by Notification No.16/2009-C.E (N.T), dated 7.7.2009, which was not applicable to the relevant period (2005-06). The Court held that the amendment of Explanation-2 by the notification was clarificatory in nature and did not affect the case's outcome. The items specified in the notification were always excluded from the manufacture of capital goods.5. Levy of Penalty under Section 11AC of the Central Excise Act, 1944:The applicants contended that there was no case of fraud, misrepresentation, or suppression of facts, and thus, the penalty under Section 11AC was not justified. The Court relied on a coordinate Bench's judgment, which held that the quantum of penalty equal to the duty is mandatory under Section 11AC. The Commissioner observed that the assessee failed to provide necessary information despite repeated notices, establishing suppression of material information. The Court found that the question of penalty was neither raised nor decided by the CESTAT, and no substantial question of law arose.6. Denial of CENVAT Credit on Capital Goods Exempt from Central Excise Duty:The applicants raised the issue of denial of CENVAT credit on capital goods exempt from central excise duty. However, the Court noted that this issue was neither raised nor decided by the CESTAT. In an appeal under Section 35G of the Central Excise Act, 1944, only grounds raised and decided by the CESTAT could be considered. Therefore, the Court did not consider this question while dismissing the appeals.Conclusion:The review applications were rejected as the Court found no error apparent on the face of the record, and all relevant issues were already considered in the judgment dated 8.3.2013. The findings of the Adjudicating Authority and the Tribunal were upheld, and no substantial question of law was found to warrant a review.