2015 (1) TMI 758 - HC - Central Excise

Court dismisses Central Excise Reference case for lack of substantial legal questions. No reference called for.

COMMISSIONER OF C. EX., HYDERABAD-I Versus TIBREVALA ELECTRONICS LTD.

The High Court dismissed the Central Excise Reference case, as the questions of law were not raised and argued before the Tribunal, concluding that no ... Availment of MODVAT Credit - removal of capital goods - invocation of Rule 57S(2)(b) of Central Excise Rules, 1944 - appellate authority, as a matter of fact found that there was no removal of the capital goods and further it has recorded a finding that the appellant-unit was doing job work though it had stopped manufacture of products by itself - Held that:- it is well settled that the question of law said to be arising from the orders of the Tribunal mean the questions which have been raised and argued before the Tribunal and not one which may be raised based on the material though not raised and argued before the Tribunal. Instances of what are the questions of law that are said to be arising from the orders of the Tribunal are lucidly elucidated in the judgment of the Supreme Court in the case of Scindia Steam Navigation Co. Ltd. v. Commissioner of Income-tax - [1961 (4) TMI 6 - SUPREME Court]. Applying the parameters as set out in the above judgment of the Supreme Court, we do not find any question of law, much less substantial question of law in the present case. - Decided against Revenue. Issues:1. Interpretation of Rule 57S(2)(b) of the Central Excise Rules, 1944 regarding removal of capital goods from a factory.2. Determination of whether capital goods are deemed to be removed when a factory stops production and ceases to be a factory.Analysis:1. The case involved a dispute over the alleged removal of capital goods after availing modvat credit. The 1st appellate authority found no removal of capital goods and noted that the appellant was engaged in job work despite halting its own manufacturing activities. The authority held that Rule 57S(2)(b) did not apply due to the absence of goods removal. This finding was unchallenged by the department before the Tribunal.2. The questions raised for reference pertained to the application of Rule 57S(2)(b) when capital goods are removed after use in a factory, and whether a premises can still be considered a factory when it ceases manufacturing excisable goods. However, these questions were not addressed by the Tribunal in the case.3. The High Court emphasized that questions of law arising from Tribunal orders must have been raised and argued before the Tribunal itself. Citing the Supreme Court's judgment in Scindia Steam Navigation Co. Ltd. v. Commissioner of Income-tax, the Court concluded that no substantial question of law was present in the case. Consequently, the Court declined to call for a reference and dismissed the Central Excise Reference case, including any related pending petitions, without costs.