2004 (1) TMI 97 - HC - Central Excise

Court Upholds Finality of Order, Dismisses Writ Petition Challenging Implementation of Order

COMMISSIONER OF CENTRAL EXCISE, MEERUT Versus CENTURY LAMINATING CO.

The court held that the Tribunal's order dated 2-4-1996 had attained finality as it was not challenged within the statutory period. The petitioner's ... Writ petition - Maintainability of Issues Involved:1. Whether the resins used for captive consumption are liable to duty under the Central Excise Tariff.2. Whether the petitioner is entitled to proforma credit or set off of input duty under Rule 56A or Notification No. 201/79.3. Validity of the Tribunal's order directing the implementation of the previous order after the omission of Rule 56A.4. Whether the finality of the Tribunal's order dated 2-4-1996 can be challenged after a lapse of five years.Detailed Analysis:1. Liability of Resins for Duty:The petitioner, a manufacturer of decorative laminated rigid plastic sheets and industrial laminated plastic sheets, claimed that melamine formaldehyde resins and phenol formaldehyde resins used for captive consumption were non-excisable intermediate products. However, the Assistant Commissioner held that these resins were liable to duty under item 15-A of the Central Excise Tariff. The matter was contested and eventually reached the Tribunal. During this period, Rules 9 and 49 of the Central Excise Rules were amended retrospectively in 1982, bringing the concept of deemed removal for captive consumption, making the resins liable to duty.2. Entitlement to Proforma Credit or Set Off:The respondent argued before the Tribunal that they should be granted proforma credit under Rule 56A or allowed set off of input duty under Notification No. 201/79. The Tribunal noted that the Commissioner had the power to condone delays in filing applications for proforma credit under Rule 56A(2B) and also had discretion under Notification No. 201/79 to condone non-compliance with procedural formalities. The Tribunal remanded the matter back to the Commissioner to exercise these powers.3. Validity of Tribunal's Order Post-Omission of Rule 56A:The petitioner contended that Rule 56A had been omitted by Notification No. 23/94-C.E.(N.T.) dated 20-5-1994, and thus, no benefit could be allowed under this rule. They argued that once a rule is omitted, it cannot be read into the statute, and no action can be taken under it. The Tribunal's order dated 28-12-2001 directing the implementation of the order dated 2-4-1996 was challenged as illegal. The petitioner relied on the Supreme Court decision in Kolhapur Canesugar Works Ltd. v. Union of India, which held that once a rule is deleted, proceedings under it cannot continue unless saved by a saving clause.4. Finality of Tribunal's Order:The respondents argued that the Tribunal's order dated 2-4-1996 had become final as it was not challenged in reference under Section 35G, nor was any application moved for recalling or rectification. Therefore, the order must be implemented, and the consequential order dated 28-12-2001 directing its implementation could not be challenged. The respondents relied on the Supreme Court decision in Collector of Central Excise, Kanpur v. Flock (India) Pvt. Ltd., which held that an order not appealed against cannot be questioned subsequently in a refund claim.Judgment:The court held that the argument of the petitioner had no force. The Tribunal's order dated 2-4-1996 had attained finality as it was not challenged within the statutory period. The petitioner could not challenge this order after five years through a writ petition. The consequential order dated 28-12-2001 directing the implementation of the final order was thus justified and could not be challenged. The court dismissed the writ petition, emphasizing that the right to claim proforma credit accrued when the goods were manufactured and used in the final product, and the omission of Rule 56A did not affect this accrued right. The decision in Kolhapur Canesugar Works Ltd. was distinguished on the grounds that it dealt with the validity of orders under rules that were omitted without saving clauses, whereas in this case, the right to proforma credit had already accrued before the rule's omission.