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2024 (11) TMI 547
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....ana). All these four products will collectively be referred to as "products". The products were cleared by appellant till February 2009 on payment of excise duty at full tariff rate of 14.42% ad volerem by classifying them under Excise Tariff Item [ETI] 3808 99 10. 3. However, pursuant to the decision of the Tribunal in NMS Babu vs. Commissioner of Central Excise, Bangalore [2006 (198) E.L.T. 528 (Tri.- Bang.)], the appellant started classifying the products under ETI 3002 90 30, as the products of the appellant were similar to the products dealt in NMS Babu, wherein the Tribunal decided the classification of an identical product under ETI 3002 90 30. The appellant, therefore, discontinued payment of excise duty w.e.f. March, 2009, and cleared the products at NIL rate by classifying them under ETI 3002 90 30, being cultures of micro-organisms. The appellant gave intimation of this fact to the department through a letter dated 27.02.2009. 4. The department, however, directed the appellant, by a letter dated 17.03.2009, to pay excise duty on clearance of bio-pesticides under ETH 3808. 5. The appellant, by letter dated 13.04.2009 filed a detailed writeup of the manufacturing ....
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....as is itself mentioned in the show cause notice as also in the impugned order. Though the appellant have placed strong reliance on the precedent decisions of the Tribunal, the Adjudicating Authority has chosen to ignore the same and have decided the issue independently, without taking note of the earlier judgments. The fair process of adjudication requires the adjudicating authority to deal with each and every plea raised by an assessee and specifically the decisions, which apparently covers this issue. In its fairness even if the adjudicating authority was of the view that the relied upon decision deal with a different products or appellant's product is not covered by the said decisions, he was within his rights to distinguish the same, instead of a convenient pass over or skip. 8. In view of the foregoing discussion, we deem it fit to set aside the impugned order, remand the matter to the Commissioner for de novo decision, in the light of the two precedent decisions of the Tribunal referred supra. We make it clear that the remand is being made only on the above ground and we have otherwise not expressed any opinion on the merits of the case. The appellant are at liberty ....
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.... 14. The Commissioner, after considering the submissions of the appellant, by order dated 13.09.2022 confirmed the demand of excise duty of Rs. 1,00,28,180/- under section 11A with interest under section 11AB of the Central Excise Act for the period from April 2009 to January 2010, but the penalty proposed under section 11AC of the Central Excise Act was dropped. The relevant portion of the order is reproduced below: "31. The Hon'ble CESTAT has further directed for deciding the case in light of the decision in the case of NMS Babu v. C.C.E., Bangalore reported in 2006 (198) E.L.T. 528 (Tribunal.-Bang) & T. Stanes and Co. v. C.C.E., Coimbatore reported in 2009 (235) E.L.T. 183) (Tribunal. - Chennai). 32.1 As far as decision in the case of NMS Babu v. C.C.E., Bangalore reported in 2006 (198) E.L.T.528 (Tribunal.-Bang) is concerned, I find that the department while not accepting the same, preferred appeal with Hon'ble Apex Court. 32.2.1 The Apex Court decided the case on 19.09.2015 by way of remand. The operative part of the order as reported in 2015 (324) E.L.T. 3(S.C.) is as under:- 8. It is clear, therefore, that the sole basis on which the CES....
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....regate value of excisable goods produced from both companies together would exceed three crores. 33.2 I find that the Hon'ble CESTAT in their remand order had directed to decide the case in light of two precedent decisions which included T. Stanes and Co. v. C.C.E., Coimbatore reported in 2009 (235) E.L.T. 183 (Tribunal- Chennai). 34.1 As far as decision rendered in the case T. Stanes and Co. v. C.C.E., Coimbatore is concerned, I find that the department has not accepted the same and had preferred appeal with Hon'ble Apex Court. 34.2 However, later the department sought withdrawal on monetary grounds. The Apex Court while permitting withdrawal passed following order:- ORDER In terms of the change brought in the litigating policy of the Government deciding to withdraw all the matters pending for adjudication before this court in which tax effect / revenue involved is less than Rupees Two Crore, learned counsel for the appellant (s)/ petitioner (s) seek permission for withdrawal of the instant appeals and the special leave petition (s). Permission, as sought for, is granted. Accordingly, the instant appeals and the ....
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....sed for a particular application or purpose. In our respectful opinion this is the correct interpretation of the word preparation in heading 3808". The findings of the Original Authority and the above case law clearly establish that the impugned products sold by M/s. T.Stanes & Co are disinfecting insecticidal etc. preparations based on cultures of microorganisms and as such merit classification under CETH 3808. 39. For the above reasons, the decision in the case of NMS Babu Vs, CCE, Bangalore does not expound the correct position of law and hence the reliance placed thereon is not justified or proper." (emphasis supplied) 16. This appeal has been filed to assail the aforesaid order dated 13.09.2022 passed by the Commissioner. 17. Shri B.L. Narasimhan assisted by Ms. Daliya Singh, learned counsel for the appellant made the following submissions: (i) The finding recorded in the impugned order that the products are not merely cultures of micro-organisms, but preparations with a base of such culture is clearly beyond the scope of the show cause notice as it alleged that the products are actually Biological Insecticide; (ii) The Commissioner was boun....
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.... matter in the call book by letter dated 15.09.2014 for the reason that the appeals filed by the department before the Supreme Court against the orders of the Tribunal in NMS Babu and T. Stanes were pending. The Commissioner also stated that the matter will be taken up for adjudication only after the Supreme Court decided the matter. 23. It needs to be noted that the Supreme Court decided the appeal filed by the department against the decision of the Tribunal in NMS Babu on 16.09.2015 (Commissioner of Central Excise, Bangalore vs. P. J. Margo Pvt. Ltd.- 2015 (324) E.L.T. 3 (S.C.) ) and the relevant portion of the judgment of the Supreme Court is reproduced below: "2. A large number of issues were decided by the impugned judgment dated 25-10-2005 [2006 (198) E.L.T. 528 (Tribunal)], but Shri A.K. Panda, learned Senior Counsel appearing on behalf of the Revenue, has confined himself to two of these issues. According to him, the CESTAT has not dealt with whether a subsidiary company, viz., Respondent No. 3 in the present appeal, is only a dummy, consequent to which the excisable goods manufactured by it needs to be clubbed with its holding company, viz., Respondent No. 1. I....
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....medabad' [2010 (14) SCC 378 = 2011 (263) E.L.T. 15 (S.C.)]. 8. It is clear, therefore, that the sole basis on which the CESTAT has decided the issue of clubbing is bad in law. Equally, on the issue of suppression of material facts leading to the extended period of limitation being applicable to the first of the six Show Cause Notices, the CESTAT is equally cursory, relying upon one letter dated 20-7-1998 sent by the subsidiary company in which nothing is stated from which it can be said that there is suppression or otherwise of facts except the fact that M/s. Margo Bio Controls (P) Ltd. happens to be a 100 per cent subsidiary of the holding company viz., M/s. P.J. Margo (P) Ltd. 9. We are, therefore, of the opinion that this case should be remanded to the CESTAT to decide afresh as to whether any case for clubbing of excisable goods manufactured by the holding company and the subsidiary company is or is not made out on facts. Equally, the issue as to whether or not there has been suppression of material facts by both the aforesaid companies is also sent back for a re-determination on facts. 10. As this is an old matter, we request the CESTAT to take up th....
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....sues were raised by the learned counsel appearing for the department. The first contention of the department before Supreme Court was that the Tribunal had not dealt with the issue as to whether the respondent subsidiary company was only a dummy company, consequent to which the excisable goods manufactured by it would have to be clubbed with the holding company. The second issue that was raised by the department before the Supreme Court was regarding suppression of material facts by both the holding company and the subsidiary company. The Supreme Court noticed that neither the Commissioner nor the Tribunal had satisfactorily answered the first issue raised by the department. It is for this reason that the Supreme Court remanded the matter to the Tribunal to decide afresh as to whether any case for clubbing of excisable goods manufactured by the holding company and the subsidiary company had been made out or not. The Supreme Court also remitted the matter regarding suppression of material facts by the holding company and the subsidiary company to the Tribunal for re-determination on facts. 29. The judgment of the Supreme Court is, therefore, confined to these two issues and merel....
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....h that the impugned products sold by M/s. T. Stanes & Co are disinfecting insecticidal etc. preparations based on cultures of microorganisms and as such merit classification under CETH 3808". Not only this, the Commissioner proceeded to also comment on the decision of the Tribunal in NMS Babu and observed that the said decision of the Tribunal does not expound the correct position of law and hence reliance placed on it by the appellant is not justified or proper. The relevant portion of the order passed by the Commissioner is again reproduced below: "39. For the above reasons, the decision in the case of NMS Babu Vs, CCE, Bangalore does not expound the correct position of law and hence the reliance placed thereon is not justified or proper." 33. The Commissioner should have realised that there were atleast two binding decisions of the Tribunal which governed the classification issue that was to be examined by him, but the Commissioner not only exceeded his jurisdiction in taking a view contrary to the two binding decisions, but even went to the extent of observing that the decision of the Tribunal in NMS Babu does not expound the correct position of law and hence relian....
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.... not sitting in appeal over the Tribunal and we do not think that in the circumstances of this case it was open to him to say that the order of the Tribunal was wrong and, therefore, there was no injustice in disregarding that order. As we have said earlier, such view is destructive of one of the basic principles of the administration of justice. In fairness to him it must be stated that learned counsel for the respondent did not attempt to support the judgment of the Judicial Commissioner on the ground that no manifest injustice resulted from the refusal of the respondent to carry out the directions of a superior tribunal. He conceded that even if the order of the Tribunal was wrong, a subordinate and inferior tribunal could not disregard it; he readily recognised the sanctity and importance of the basic principle that a subordinate tribunal must carry out the directions of a superior tribunal." (emphasis supplied) 36. This principle was also laid down by Supreme Court in Dharma Chand Jain vs. The State of Bihar [AIR 1976 SC 1433] and the observations are: "The State Government being a subordinate authority in the matter of grant of a mining lease, was obliged under....
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....re are decisions of the Supreme appellate tribunal which do not attract the unanimous approval of all members of the judiciary. When I sat in the Court of Appeal, I sometimes thought the House of Lords was wrong in over ruling me. Even since that time there have been occasions, of which the instant appeal is one, when alone or in company. I have dissented from a decision of the majority of this House. But the judicial system only works if someone is allowed to have the last word and if that last word, once spoken, is loyally accepted." (emphasis supplied) 38. In this connection it will also be appropriate to refer to the decision of the Supreme Court in Union of India vs. Kamlakshi Finance Corporation Ltd [1991 (55) E.L.T. 433 (S.C.)] . The order passed by the Assistant Collector not only ignored the order of the Collector (Appeals) remanding the matter, but also distinguished the decision of the Tribunal by observing that the decision of the Tribunal had not been agreed to by the Department as an appeal had been filed in the Supreme Court. The assessee filed a writ petition in the Bombay High Court to challenge the said order of the Assistant Collector. The High Court not on....
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....he jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws. ***** 8. We have dealt with this aspect at some length, because it has been suggested by the learned Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. It is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assesses public without any benefit to the Revenue. We would like to say that the department should take these....
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....o laid down by the Coordinate Benches, on the very same issue, the Member (Technical) has passed the prejudicial portion of the order, which cannot be allowed to be sustained. 15. We find much force in the submissions so made by the learned Senior counsel for the petitioner. The prejudicial portion of the order has been passed by the Tribunal in derogation of the various orders passed by the coordinate benches of the Tribunal on the very same issue. xxxxxxxxxx. Therefore, we hold that the very reference made by the Tribunal to determine as to whether the conclusion reached by the Member (Judicial) is right or the one made by the Member (Judicial) itself is unnecessary. The issue before the Tribunal has already been examined and adjudicated by the coordinate benches and it binds the Tribunal in all respects. While so, the Tribunal cannot go beyond the settled issue and to re-adjudicate the same by referring the dispute to a third member. Judicial discipline requires that the orders of the coordinate bench or the jurisdictional High Court have to be followed without in any manner attempting to factually reexamine or re-adjudicating the same issue. 16. At this junctu....