2015 (10) TMI 44 - HC - Central Excise

Court upholds distinction between excisable & exempt goods, dismisses review petitions under limited review jurisdiction.

MAHINDRA & MAHINDRA LTD. Versus UNION OF INDIA

The court dismissed the review petitions, finding no patent error on the face of the record. It upheld the distinction between excisable and exempt goods, ... Review petition against order previous order passed [2015 (9) TMI 403 - BOMBAY HIGH COURT] - Contradictory judgments [2015 (1) TMI 673 - BOMBAY HIGH COURT] and [2015 (9) TMI 403 - BOMBAY HIGH COURT] - Applicability of Rule 6(6)(v) of the Cenvat Credit Rules, 2004 - Court earlier held that exempted goods (tractors) can be exported under Bond/Undertaking-1 in terms of Rule 19 of the Central Excise Rules, 2002 and that by virtue of Rule 6(6)(v) of the Cenvat Credit Rules, 2004, the provisions of Rule 6(1) and 6(3) are not applicable in respect of excisable goods cleared with payment of duty for export under bond. However, in the judgment/order under review, this Court has held that Rule 6(6)(v) will not assist the review petitioners. Held that:- We have held in paragraph 75 that the conclusions therein rendered by a Division Bench of this Court was for the purpose of dealing with the essential controversy and whether in respect of exempted goods cleared for export and inputs in respect of which are dutiable, their clearance by giving Bond under Rule 19 of the Cenvat Credit Rules, 2002, is permissible. We have reached our own conclusions as to why the judgment in the case of Repro India Ltd. cannot be of any assistance to the assessees - Our conclusion may be or may not be erroneous. However, we cannot reconsider or correct the same in the garb of a review. We are not deciding an appeal and, therefore, will not be in a position to refer to the record all over again. While dismissing the assessee’s appeals and writ petitions, we have given our reasons and it is during the course of recording them that we referred to the contentions of the petitioners herein. We referred to all the judgments cited by them. We have, independent of those judgments, held that the petitioners’ writ petitions and appeals cannot be allowed. - However, in the case of M/s. Sharp Menthol India Ltd. this sub-rule has been held to be referring to “exempted goods”. That is why we have given somewhat detailed attention to the conclusions reached in M/s. Sharp Menthol India Ltd. in paragraphs 80 to 83 of the judgment under review. That was to caution everybody concerned about its applicability. In paragraph 84 we have concluded that all matters arose firstly before the amendment to the Central Excise Act, 1944 by which sub-section (1A) was inserted in Section 5A of the same. We have also reached the conclusion that Cenvat credit cannot be availed of in case of such inputs or input services which are in relation to exempted goods and exempted services. Therefore, what is excisable and dutiable and what is exempted has been noted by us. It is for that reason as well we have denied relief to the review petitioners. - Decided against Petitioners. Issues Involved:1. Patent error on the face of the record.2. Applicability of Rule 6(6)(v) of the Cenvat Credit Rules, 2004.3. Distinction between excisable and exempt goods.4. Scope and ambit of review jurisdiction.Detailed Analysis:1. Patent Error on the Face of the Record:The petitioners argued that the judgment under review overlooked a previous judgment in the same proceedings, creating an inconsistency. The court had earlier dismissed Central Excise Appeal No. 39 of 2013, upholding the Tribunal's order based on precedents from Repro India Limited and Sharp Menthol India Limited. The petitioners contended that the court's subsequent decision contradicted this by holding that Rule 6(6)(v) would not assist them, thus creating a patent error on the face of the record.2. Applicability of Rule 6(6)(v) of the Cenvat Credit Rules, 2004:The petitioners emphasized that Rule 6(6)(v) should apply to their case as it allows exempted goods to be exported under Bond/Undertaking-1, arguing that the term 'excisable goods' in Section 2(d) of the Central Excise Act, 1944, includes exempt goods. They cited several judgments to support this interpretation. However, the court in its judgment under review had concluded that Rule 6(6)(v) does not apply to the petitioners, a point which the petitioners sought to challenge.3. Distinction between Excisable and Exempt Goods:The court had noted a distinction between excisable and exempt goods in its judgment under review, which the petitioners argued was incorrect. They contended that all excisable goods are covered by the definition in Section 2(d) of the Central Excise Act, 1944, and thus exempt goods should not be treated as a distinct category. The court, however, maintained that the terms 'excisable goods' and 'exempt goods' are distinct and that Rule 6(6)(v) refers specifically to 'excisable goods.'4. Scope and Ambit of Review Jurisdiction:The court outlined the limited scope of review jurisdiction, emphasizing that a review is not an appeal or revision and cannot be used to reappraise the entire case. The court referred to the Supreme Court's principles, stating that a review lies only for a patent error and not for re-hearing an erroneous decision. The court concluded that the petitioners were attempting to reargue the same points that had already been considered and decided, which is not permissible in a review.Conclusion:The court dismissed the review petitions, stating that the petitioners' arguments did not reveal any patent error on the face of the record. The court reiterated that the distinction between excisable and exempt goods was correctly noted in the judgment under review and that the scope of review jurisdiction does not allow for re-hearing or reappraising the entire case. The petitioners' reliance on Section 2(d) of the Central Excise Act, 1944, and the cited judgments were considered fresh arguments that could not be entertained in a review. Thus, the review petitions were dismissed without any order as to costs.