2017 (7) TMI 558 - HC - Central Excise

High Court sets aside order on Central Excise Act valuation, awaits Supreme Court ruling

M/s. Mantra Industries Limited G. Velmurugan, In Charge Versus The Commissioner of Central Excise Customs & Service Tax

The High Court of Madras allowed the Writ Appeals, setting aside the Single Judge's order regarding the valuation of goods under the Central Excise Act. ... Valuation - the contention of the Appellants/Assessees, broadly, before the Adjudicating Authority was that, the sales made were not institutional sales and, thus, they were assessable Under Section 4A of Central Excise Act, 1944 - Held that: - what clearly emerges in so far as the issue pertaining to how assessable value has to be arrived at, in the instant case, is, admittedly, pending consideration of the Supreme Court in: Civil Appeal Diary No.31455 of 2015 - the decision, on merits, involving Appellants/Assessees before us, would be governed by the final decision of the Supreme Court in the aforementioned Civil Appeals. Since, the Revenue in other cases have kept the SCN in abeyance, by keeping them in the call book [which is a method adopted by the Department], no coercive measures will be taken against the Appellants/Assessees, pending consideration of the of the aforementioned Civil Appeals by the Supreme Court. Appeal allowed - decided in favor of appellant. Issues:Appeal against judgment and order dismissing Writ Petitions - Valuation of goods for assessment under Central Excise Act - Applicability of previous Tribunal judgments - Adjudicating Authority's failure to consider Tribunal's ruling - Revenue's appeal pending before Supreme Court - Alternative remedy available to parties - Directions based on pending Supreme Court decision.Analysis:The High Court of Madras heard appeals against a judgment dismissing Writ Petitions related to the valuation of goods under the Central Excise Act. The core issue revolved around the valuation of Table Top Wet Grinders and Mixer Grinders supplied to the Tamil Nadu Civil Supplies Corporation. The Appellants argued that the sales were not institutional and should be assessed under Section 4A of the Central Excise Act. They relied on a Tribunal judgment in a similar case to support their position. However, the Adjudicating Authority did not consider this precedent, leading to the filing of Writ Petitions which were dismissed by the Single Judge, who directed the parties to pursue an alternative remedy.The Appellants contended that the Adjudicating Authority should have followed the precedent set by a higher Appellate Authority, citing a Supreme Court judgment in support of their argument. On the other hand, the Revenue acknowledged that a previous Tribunal judgment favored the Assessees, but they had appealed to the Supreme Court, which was pending. The Revenue also relied on another Tribunal judgment to support the correctness of the Order-in-original.The High Court observed that the issue of assessable value was pending before the Supreme Court in a specific Civil Appeal. Therefore, the Court decided to dispose of the Writ Appeals by directing that the final decision on merits would be governed by the Supreme Court's decision in the pending Civil Appeals. The Court also ordered that no coercive measures would be taken against the Appellants pending the Supreme Court's decision. However, the Court clarified that its directions would not prevent the Appellants from seeking statutory remedies.Ultimately, the Writ Appeals were allowed, setting aside the Single Judge's order, with no costs imposed. The High Court's decision was based on the pending Supreme Court decision and the need to await the final resolution of the legal issues involved in the case.