2008 (5) TMI 38 - AT - Central Excise

Appeals on Loss of Goods in Storage Deemed Non-Maintainable

COMMR. OF C. EX., JAMSHEDPUR Versus TISCO LTD.

The Appeals concerning loss of goods in storage under Section 35B of the Central Excise Act, 1944 were deemed non-maintainable before the Appellate ... Maintainability of the Appeals in view of Clause (a) of first proviso to Sec. 35B - Loss, whether it occurs due to unavoidable accident or otherwise, is a loss. So long as such loss occurs in storage, it is a loss referred to in Section 35B proviso - artificial distinction between one type of loss & another isn’t correct in view of unambiguous language of Sec. 35B - present Appeals arising out of the Order of Comm. (A) relating to loss of goods in storage in a factory are not maintainable Issues:1. Maintainability of appeals under Section 35B of the Central Excise Act, 1944 concerning loss of goods in storage.2. Applicability of Section 35EE for aggrieved parties against orders of Commissioner (Appeals).3. Power of the Tribunal to transfer appeals to the Central Government for disposal.Issue 1 - Maintainability of Appeals:The Appeals by the Revenue were brought before the Appellate Tribunal CESTAT, Kolkata due to a Reference made by the Division Bench regarding the maintainability of the Appeals under Section 35B of the Central Excise Act, 1944. The question arose concerning the first proviso to Section 35B, particularly Clause (a), which restricts appeals to the Tribunal in cases of loss of goods occurring in transit or storage. The Tribunal referred to a previous decision by a Larger Bench in the case of Supercoats Industries v. Commissioner of Central Excise, Thane-II, where it was established that any loss of goods in storage, regardless of the cause, constitutes a loss within the meaning of the proviso. The Tribunal agreed with this view and concluded that the present Appeals related to the loss of goods in a factory's storage and, therefore, were not maintainable before the Tribunal.Issue 2 - Applicability of Section 35EE:The Tribunal highlighted that the remedy for matters like the present one is provided in Section 35EE of the Central Excise Act, 1944. This section allows any party aggrieved by an Order of Commissioner (Appeals) to file a revision before the Central Government. In this case, since the Appeals were deemed non-maintainable before the Tribunal, the aggrieved party was directed to pursue the appropriate legal recourse under Section 35EE for a revision before the Central Government.Issue 3 - Power of Tribunal to Transfer Appeals:During the proceedings, a decision of the Madras High Court was referenced, emphasizing that while the Tribunal lacks the power to transfer an appeal to the Central Government for disposal, the appeal papers can be returned to the Department for proper presentation before a forum with jurisdiction. Following this principle, the Tribunal directed the appeal papers to be returned to the Department to enable them to file a revision before the Central Government under Section 35EE of the Act. Additionally, the Tribunal clarified that the time spent during the pendency of the appeals before the Tribunal would not hinder the Department from seeking condonation of any delay in the appropriate authority, as the Appeals were filed in good faith under proper legal advice.In conclusion, the Tribunal held that the Order of Reference was legally invalid, and the appeal papers were directed to be returned to the Department for proper presentation before the appropriate authority, according to the law. The Appeals were disposed of accordingly.