2008 (12) TMI 116 - AT - Central Excise

Tribunal dismisses Revenue's appeals for lack of jurisdiction; decision announced in open court.

COMMISSIONER OF CENTRAL EXCISE, DIBRUGARH Versus KHUSHI AROMATICS

COMMISSIONER OF CENTRAL EXCISE, DIBRUGARH Versus KHUSHI AROMATICS - 2009 (236) E.L.T. 465 (Tri. - Kolkata) Issues Involved:1. Relationship between M/s. Khushi Aromatics and M/s. Kothari Products Ltd.2. Time-barred status and applicability of the extended period under Section 11A.3. Applicability of Rules 9 and 8 of Central Excise Valuation Rules.4. Legality of refund under Notification No. 32/99-C.E.5. Alleged evasion of duty through undervaluation.6. Enforceability of claims under Section 11-D.7. Wrongful availment of Cenvat credit.8. Imposition of penalty on Shri Mitesh Kothari.Detailed Analysis:1. Relationship between M/s. Khushi Aromatics and M/s. Kothari Products Ltd.:The adjudicating authority concluded that M/s. Khushi Aromatics and M/s. Kothari Products Ltd. were not related as per Section 4(3)(b) of the Central Excise Act, 1944. This was based on the finding that there was no mutuality of interest between the two entities.2. Time-barred Status and Applicability of the Extended Period under Section 11A:The adjudicating authority held that the proviso to Section 11A(1) was not applicable, as there was no willful misstatement, suppression of facts, or contravention of the provisions of the Act with the intent to evade duty. Consequently, the show cause notice was deemed time-barred, and the extended period of five years was not invocable.3. Applicability of Rules 9 and 8 of Central Excise Valuation Rules:The authority determined that the value of goods should be assessed under Section 4(1)(a) of the Act, as the two firms were not related. Thus, the charges brought against M/s. Khushi Aromatics under Rules 9 and 8 of the Central Excise Valuation Rules were unsustainable.4. Legality of Refund under Notification No. 32/99-C.E.:It was found that there was no excess refund granted to M/s. Khushi Aromatics. The authority noted that the refund was in line with the exemption Notification No. 32/99-C.E., dated 8-7-1999, and thus, there was no loss of revenue or evasion of duty.5. Alleged Evasion of Duty through Undervaluation:The adjudicating authority concluded that there was revenue neutrality in the case, as M/s. Khushi Aromatics was availing exemption under Notification No. 32/99-C.E., and whatever duty was paid was refunded. Therefore, the charges of evasion of duty through undervaluation were unfounded.6. Enforceability of Claims under Section 11-D:The authority held that the allegations of excess Central Excise duty collection and deposit in the government exchequer were not sustainable, as the goods were valued under Section 4(1)(a) of the Act, and the duty charged was deposited in the government account.7. Wrongful Availment of Cenvat Credit:It was concluded that there was no evidence to prove that M/s. Khushi Aromatics had availed Cenvat credit wrongly. The charges against M/s. Kothari Products Ltd. for availing excess and irregular Cenvat credit were also held to be unsustainable.8. Imposition of Penalty on Shri Mitesh Kothari:The adjudicating authority found no evidence to prove that Shri Mitesh Kothari was personally involved in the evasion of duty or had suppressed the relationship between M/s. Khushi Aromatics and M/s. Kothari Products Ltd. Thus, the charge against him was untenable.Appeal by Revenue:The Revenue appealed against the adjudicating authority's decision, arguing that the order was neither legal nor proper. However, the tribunal dismissed the appeals on preliminary grounds, noting that the review order was passed by a committee not authorized by the relevant notification.Preliminary Objections:The respondents raised preliminary objections regarding the validity of the review order, arguing that it was passed by an unauthorized committee. The tribunal agreed, holding that the review order was passed contrary to the notification, making the appeals not maintainable.Conclusion:The tribunal dismissed the Revenue's appeals on the preliminary ground of lack of jurisdiction, without addressing the merits of the case. The decision was pronounced in the open court on the date of hearing.