2019 (1) TMI 128 - HC - Central Excise

Court overturns Tribunal ruling for inadequate reasoning, stresses importance of thorough judgments

The High Court overturned the Tribunal's judgment due to inadequate reasoning and analysis, directing the appeals to be reheard and decided in compliance ... Recovery of Central excise duty exemption availed with Interest and penalties - cancellation of Export License - Held that:- The Tribunal itself records that both sides were heard at length. If, that be so, the Tribunal was required to give proper reasons for its ultimate conclusions. The Tribunal's order is rather cryptic, does not bring out the full controversy, the arguments raised by both sides and Tribunal's conclusions on said contentions. Unreasoned orders leave the appellate Court the onerous task of finding out the facts and law from the sources outside of the judgment impugned before it. Even otherwise, as a final fact finding authority, the Tribunal is expected to examine all contentions of law as well as of facts. High Court in further appeal would entertain only substantial questions of law. The impugned judgment of the Tribunal is set aside - Appeals of both the appellants before the Tribunal are revived. Issues:Appeal against judgment of the Customs, Excise and Service Tax Appellate Tribunal regarding recovery of central excise duty exemption and personal penalty imposition.Analysis:The appeals arose from a common judgment of the Tribunal dated 12.12.2017. The Appellant, a Private Limited Company, received a show cause notice regarding alleged sales to Panorama Enterprises, triggering a demand for recovery of central excise duty exemption with interest and penalties. The director of the company was also implicated for a personal penalty. Both the company and its director opposed the proposal, engaging in the show cause notice proceedings. The adjudicating authority upheld the duty recovery, interest, and penalty, imposing a personal penalty on the director. Unsuccessful at the appellate level, both parties approached the Tribunal, contending that the sales were valid despite subsequent license cancellation of Panorama Enterprises.The Tribunal, in a brief judgment, dismissed both appeals, citing that the goods were sold without consideration, no payment was received, and no effort was made to recover the amount. It was discovered that Panorama Enterprises was a fictitious firm without a valid ARO. The High Court expressed dissatisfaction with the Tribunal's handling of the issues, noting the lack of detailed reasoning and analysis in the judgment. Emphasizing the importance of thorough judgments to facilitate appellate review, the High Court set aside the Tribunal's judgment, reviving both appeals for fresh consideration in accordance with the law.In conclusion, the High Court overturned the Tribunal's judgment due to inadequate reasoning and analysis, directing the appeals to be reheard and decided in compliance with legal standards. The decision highlights the necessity for comprehensive judgments to aid in appellate review and ensure proper consideration of all legal and factual contentions.