2008 (1) TMI 294 - HC - Central Excise

High Court overturns Tribunal ruling on retrospective application of tax notification

The appeal was dismissed by the Commissioner of Central Excise (Appeals) regarding the adoption of Notification No. 13/2003-C.E. (N.T.) by CESTAT, Mumbai ... Whether CESTAT, was correct in adopting the Notification No. 13/2003-C.E. for the goods cleared before the issuance of the Notification - tribunal reversed the order of the Commissioner and granted relief as prayed by respondents - no reasons have been recorded by the Tribunal in reversing the order of the Commissioner (Appeals) – impugned order is set aside & remand the matter back to the tribunal for reconsideration according to law Issues:1. Adoption of Notification No. 13/2003-C.E. (N.T.) by CESTAT, Mumbai for goods cleared before its issuance.2. Retrospective application of Notification No. 13/2003-C.E. (N.T.), dated 01.03.2003.3. Assessment of credit taken by the assessee on second hand machinery and original price.Analysis:1. The appeal raised concerns regarding the adoption of Notification No. 13/2003-C.E. (N.T.) by CESTAT, Mumbai for goods cleared before its issuance. The Commissioner of Central Excise (Appeals) determined the quantum of credit admissible on a specific invoice dated 25.9.2002. It was found that the assessment value of the second hand/damaged machines supplied through the invoice was Rs.86,500, while the original invoice stated Rs.3,91,380. The credit of Rs.51,101 was taken on the same. The Commissioner held that the respondents were entitled to credit of duty paid on Rs.86,500, i.e., Rs.13,480, based on the rule as it then stood, and dismissed the appeal.2. The issue of the retrospective application of Notification No. 13/2003-C.E. (N.T.), dated 01.03.2003 was also raised. The Tribunal, in the appeal by the respondents, granted complete relief without addressing whether the rule as originally stood or as amended on 1.3.2003 would be applicable. Due to the lack of reasons recorded by the Tribunal in reversing the Commissioner (Appeals) order, the High Court set aside the decision and remanded the matter back to the tribunal for reconsideration according to law.3. Lastly, the matter of assessing the credit taken by the assessee on the second hand machinery and the original price was discussed. The Tribunal's decision to grant relief without proper reasoning led to the High Court's intervention, resulting in the matter being remanded for proper consideration. The appeal was disposed of accordingly, emphasizing the importance of addressing legal issues with clarity and adherence to established rules and regulations.