2005 (7) TMI 268 - AT - Central Excise

Tribunal Overturns Order in Central Excise Case, Emphasizes Res Judicata

SUNNY TEXTILES LTD. Versus COMMISSIONER OF C. EX., HYDERABAD

The Tribunal set aside the impugned order in a case involving capacity determination under the Central Excise Act, citing finality established by a ... Production capacity based duty - Determination of - Res-judicata Issues:- Capacity determination under Section 3A of the Central Excise Act- Review of Commissioner's order- Multiple adjudication on the same set of facts- Ignoring verification reports- Penalty under Rule 209A on directors of the CompanyCapacity determination under Section 3A of the Central Excise Act:The case involved an appeal against the Commissioner's order regarding the capacity determination of a unit manufacturing man-made fabrics. The unit's capacity was assessed based on the Hot Air Stenter Annual Capacity Determination Rules 1998. The appellant contested a re-determination of the unit's capacity from three chambers to five chambers, invoking the extended period. The Tribunal noted the previous dismissal of the Revenue's appeal by the CESTAT, establishing finality on the matter. The Tribunal emphasized that it is the final fact-finding authority, and the bar of res judicata applied, leading to the setting aside of the impugned order and allowing the appeals with consequential relief.Review of Commissioner's order:The appellant argued that the Commissioner lacked the power to review his own order, citing precedents where it was held that a detailed verification before the final duty determination order precludes the Commissioner from recalling or reviewing the order. The appellant also referenced a case where it was established that a quasi-judicial authority cannot review its own order unless expressly conferred by the statute. The Tribunal considered these arguments and ultimately set aside the impugned order based on the finality established by the previous CESTAT order.Multiple adjudication on the same set of facts:The appellant contended that multiple adjudications on the same set of facts were not justified, especially since the CESTAT had already dismissed the departmental appeal based on a verification report. The Tribunal agreed with this argument, emphasizing that the issue had reached finality with the previous CESTAT order, and the impugned order had no merits due to the principle of res judicata.Ignoring verification reports:The appellant raised concerns about the Commissioner ignoring verification reports and relying on retracted statements to pass the impugned order. The Tribunal noted the verification reports indicating the dismantling of chambers in the unit, which had been considered in previous proceedings. The Tribunal found that the Commissioner's reliance on the retracted statement was not justified, and the impugned order was deemed unsustainable due to the disregard of crucial verification reports.Penalty under Rule 209A on directors of the Company:The appellant argued that the penalty under Rule 209A on the directors of the company was not sustainable, as mis-declaration was not a valid ground for imposing such a penalty. Case laws were cited to support this argument. The Tribunal did not delve deeply into this issue in the judgment provided but focused more on the capacity determination and review of the Commissioner's order.In conclusion, the Tribunal set aside the impugned order based on finality established by a previous CESTAT order, emphasizing the principle of res judicata and the Commissioner's lack of power to review his own order after a detailed verification process. The concerns raised by the appellant regarding multiple adjudications, ignoring verification reports, and the sustainability of penalties under Rule 209A were also addressed to varying extents in the judgment.