2024 (9) TMI 770 - HC - Central Excise

Court Condones Appeal Delays, Upholds Limits on Circulars Over Statutory Provisions, Dismisses Revenue's Claims.

Commissioner of Central Excise And Service Tax, Haldia Commissionerate Versus M/s. Indian Oil Corporation Limited

The Calcutta HC allowed the applications to condone delays in filing and restore appeals dismissed for non-prosecution, despite unsatisfactory ... Condonation of delay in filing the application for restoration - HELD THAT:- Though the reasons given are not very satisfactory yet since the appeal had been filed under Section 35G of the Central Excise Act, 1944, way back in the year 2020 and the appeal was pending, and we are required to consider as to whether any substantial question of law arose for consideration the discretion is exercised and the delay in filing the application is condoned for restoration. Whether the findings of the adjudicating authority that after removal of goods inter mixing of SKO with MS/HSD amounts to manufacture? - HELD THAT:- The reasoning given by the learned Tribunal to be perfectly valid and justified, as the Board cannot issue a Circular contrary to the statutory provision nor the adjudicating authority can travel beyond the allegations in the show-cause notice - there are no grounds to interfere with the order passed by the learned Tribunal. The appeal fails and dismissed and the substantial questions or law are answered against the revenue. Issues:Delay in filing application for restoration, restoration of appeal dismissed for non-prosecution, delay in filing appeal, substantial questions of law under Section 35G of the Central Excise Act, 1944.Delay in filing application for restoration:The High Court of Calcutta considered an application to condone the delay in filing an application for restoration. The appeal was filed under Section 35G of the Central Excise Act, 1944, in 2020 and was pending. The court, despite unsatisfactory reasons for the delay, exercised discretion and allowed the application for restoration (GA/3/2024).Restoration of appeal dismissed for non-prosecution:Another application (GA/4/2024) was filed to restore an appeal that was dismissed for non-prosecution. The court found the reasons given in the affidavit acceptable and allowed the application, restoring the appeal to the file.Delay in filing appeal:An application (GA/1/2020) was filed to condone a delay of 151 days in filing an appeal. Despite opposition from the respondent's advocate, the court, considering the requirement to determine if any substantial question of law arises, exercised discretion and allowed the application, treating it as on the day's list.Substantial questions of law under Section 35G of the Central Excise Act, 1944:The appeal challenged a common order passed by the Customs, Excise and Service Tax Appellate Tribunal. The revenue raised substantial questions of law regarding the interpretation of C.B.E.C.'s Circular No. 636/27/2002/-CX. The High Court heard arguments from both sides and examined the issue in detail.Analysis of the judgment:The respondent, a public sector undertaking, had filed an appeal before the Tribunal challenging the order passed by the Commissioner of Central Excise. The issue revolved around the reliance on C.B.E.C.'s Circular No. 636/27/2002-CX regarding the payment of duties in cases of intermixing of products. The Tribunal considered the circular's validity and found that it cannot override statutory provisions. It also analyzed whether intermixing of products amounted to manufacture, concluding that it did not. The Tribunal's decision was based on legal principles and relevant case law, including the Supreme Court's rulings.The High Court upheld the Tribunal's decision, emphasizing that circulars cannot contravene statutory provisions and adjudicating authorities cannot exceed the scope of show-cause notices. The court found no grounds to interfere with the Tribunal's order and dismissed the appeal, answering the substantial questions of law against the revenue. The judgment highlights the importance of adhering to statutory provisions and the limitations of circulars in interpreting legal matters related to taxation and excise duties.