2017 (2) TMI 668 - HC - Central Excise

Dismissal of Appeal Under Section 35L: Rate of Duty Questions

The appeal was dismissed based on maintainability grounds under Section 35L of the Central Excise Act, 1944. The Court concurred with the Tribunal's ... Natural justice - Whether the learned Tribunal has erred in deciding the Appeal of the Appellant without Notice of final hearing of the same? - maintainability of appeal - Held that: - The maintainability of an appeal under Section 35L depends upon the order impugned and not upon the grounds on which it is challenged or upon the infirmities that resulted in the order being passed - The alleged failure to furnish reasons even if established is only one of the aspects of the impugned order. It is not the order itself. It is an order that is challenged in appeal. The purpose of an appeal is to have set-aside the operative part of the order. There is a distinction between an order and the grounds on which it is based. The challenge to the grounds on which it is passed or the basis on which it is founded is to that end. Section 35L is not limited to certain aspects of an order referred to in Clause (b) of sub Section (1) therein. It pertains to the order itself and all aspects thereof. Appeal dismissed on the ground of non-maintainability. Issues:1. Maintainability of the appeal under Section 35L of the Central Excise Act, 1944.2. Interpretation of a Notification dated 01.03.2003 issued under Section 5A of the Act regarding exemption of excisable goods.3. Clubbing of clearances made by various units for eligibility under the notification.4. Appeal grounds based on the absence of reasons in the order.Issue 1: Maintainability of the AppealThe respondent raised a preliminary objection regarding the maintainability of the appeal under Section 35L(1)(b) and (2) of the Act, arguing that the appeal lies to the Supreme Court for orders relating to the determination of questions regarding the rate of duty of excise or the value of goods for assessment. The Tribunal upheld this objection, citing a Division Bench judgment that emphasized the appealability of questions related to the rate of duty to the Supreme Court. The Court concurred with this view, holding that the appeal was not maintainable due to the nature of the questions involved falling under the ambit of Section 35L.Issue 2: Interpretation of Notification for ExemptionThe appellant claimed the benefit of a Notification exempting excisable goods from excess excise duty. The Notification specified conditions for exemption, including the aggregate value of clearances and exclusions for certain clearances. The Tribunal considered factors like common control, financial flow, and brand ownership to determine eligibility for the exemption. The Court did not delve into the merits of this contention due to the maintainability objection upheld.Issue 3: Clubbing of Clearances for EligibilityThe Tribunal upheld the order considering the clubbing of clearances from various units to ascertain eligibility under the notification. Citing a Division Bench judgment, the Court noted the similarity of issues with the present case and the binding nature of the precedent. The appeal was deemed not maintainable based on this established legal position.Issue 4: Appeal Grounds Based on Absence of ReasonsThe appellant contended that the impugned order lacked reasons, which were deemed mandatory. However, the Court clarified that the maintainability of an appeal under Section 35L is based on the nature of the order itself, not the grounds for challenge. Even if the order had deficiencies, the appeal would still be restricted to the Supreme Court if falling under Section 35L(1)(b). The Court emphasized the distinction between challenging an order and its grounds, ensuring uniformity in appeal procedures.In conclusion, the appeal was dismissed solely on the grounds of maintainability, emphasizing the importance of adhering to the statutory provisions for appeal jurisdiction under Section 35L of the Act.