TMI Blog2015 (9) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Central Excise, Kanpur to pass the order ignoring the remand direction and confirming the demand on the same grounds as taken in the first order in original which was set aside by the Tribunal. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the 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. - No merit in this appeal. No substantial question of law arises - Decided against Revenue. - Central Excise Appeal No. - 202 of 2015 - - - Dated:- 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Years 2005-2006, 2006-2007, 2007-2008, 2008-2009 and for the period from 01.04.2009 to 06.07.2009 and from 07.07.2009 to 30.09.2009. Another show cause notice dated 29.10.2010 was issued on similar grounds for the period from 01.10.2009 to 31.03.2010 for breach of Rule 6(3) of the Rules demanding Central Excise Duty of ₹ 15,92,240/-. 7. The aforesaid two show cause notices were adjudicated by the Commissioner of Central Excise, Kanpur and an order in Original No.09, dated 27.05.2011 was passed confirming a demand of duty of ₹ 95,51,744/- for the period from 01.04.2008 to 31.03.2010 and allowed application of the assessee under Section 73 of the Finance Act, 2010 extending the benefit of ₹ 1,29,36,741/- for the period from 01.04.2005 to 31.03.2008. While passing the Order in Original, the Commissioner of Central Excise, Kanpur recorded a finding that the assessee had filed the application under Section 73 of the Finance Act, 2010 for the entire period of show cause notice along with a certificate of Chartered Accountant in terms of Section 73(2) of the Finance Act, 2010, debited ₹ 8,68,167/- in the credit amount vide Entry No.154, dated 01.11.2010 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admission of the appeal. After granting such waiver, we take up the appeal itself for disposal. 11. Since we are of the view that the Commissioner has not given proper reasons why benefit under Section 73 of Finance Act, 2010 is not applicable for the period April 2008 to March, 2010. In our view, this retrospectively amended provisions are applicable for the impugned period also. If the calculations submitted by the appellant is not correct, the Commissioner has to calculate the correct amount to be reversed explaining the method he proposes to adopt and giving an opportunity for hearing the appellant. Therefore, we set aside the impugned order and remand the matter to the adjudicating authority to properly decide the quantum of input credit to be reversed by the appellants as per provisions of Rule 6 of Cenvat Credit Rules. Thus the stay petition and appeal are disposed of. 10. Since there were certain mistakes in the said order of the Tribunal, the assessee moved a rectification of mistake application, which was disposed of by Misc. order No.719/2012-EX(BR) dated 19.06.2012 as under: 4. The last paragraph of the order shall be numbered as '11' instead of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the matter, they had reversed the amount of ₹ 15,92,240/- on 23-08-2010 and had simultaneously taken credit on the inputs/ input services against which the credit had not been taken. (xiii) In view of the aforesaid section 73(1) of Finance Act, 2010 read with Rule 6(3)(ii) of CENVAT Credit Rules, 2004 (as applicable w.e.f. 01-04-2008), they submitted an application dt. 04-11-2010 and reversed/ paid the amount of ₹ 8,68,167/- for the period from 01-04-2005 to 31-08-2009 along with interest of ₹ 7,78,472/-. During the period from 01-04-2005 to 31-08-2009, they had not taken credit of ₹ 1,57,73,152/- and submitted its details. The year wise breakup is as under: Year Total Cenvat Credit (Rs.) Credit availed (Rs.) Credit not availed (Rs.) 2005-06 36,75,608 9,74,781 27,00,827 2006-07 62,51,396 28,19,298 34,32,098 2007-08 65,01,876 24,12,157 40,89,719 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d separate account and inventory of the inputs and input services used in or in relation to the manufacture of dutiable and exempted final products and on this basis, demand of ₹ 95,51,744 /- has been confirmed on the basis of 5%/10% of the value of the exempted final products cleared during the period 1.4.2008 to March, 2010. However, the Tribunal vide Final Order dated 27.02.2012 read with misc. order dated 11.06.2012 in respect of ROM application, has held that the appellant even for the period from April, 2008 to March, 2010, would be eligible for the benefit of Section 73 of Finance Act, 2010 and accordingly, would be liable to pay only an amount equal to the actual cenvat credit involved in respect of input or input service used in or in relation to the manufacture of exempted final products and the matter had been remanded to the Commissioner only for the quantification of the amount after hearing the appellant. Besides this, the Tribunal had specifically held that since the matter involves interpretation of law, imposition of penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 is not called for and had set aside the penalty. We notice that in the de novo order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to manufacture and clearance of exempted goods as far this purpose a written option is required to be given to the jurisdictional Superintendent of Central Excise in terms of Rule 6( 3A ) and in this case, no such option given by the assessee is on record. However, while giving the above findings, the Commissioner has maintained total silence on the pleas of the Appellant, as recorded in para 8 of her order, that during the period of dispute, they had been maintaining separate account for receipt and consumption of the inputs input services meant for the manufacture of exempted final products and they had not taken cenvat credit in respect of inputs/input services used in the manufacture of exempted goods. This plea of the Appellant stands confirmed by the verification report dated 6.8.2013 of the Range Superintendent to Superintendent (Tech.), Central Excise Division, Agra and the report sent by AC, Agra to AC (Adjudication), Headquarters office, Kanpur, according to which during 2008-2009 and 2009-2010, the credit not taken in respect of inputs/input services used in or in relation to manufacture of exempted final products was more than the credit required to be rever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 27.12.2012, the Commissioner cannot once again go into the question of applicability of the provisions of Rule 6(3)(ii). Since the Tribunal had set aside the penalty, in de novo proceedings, the Commissioner cannot decide to impose the penalty again. 14. The conduct of the Commissioner in passing the impugned order, which was in course of de-novo proceedings in pursuance of the Tribunal's Final Order dated 27.12.2012 read with Misc. Order dated 11.06.2012 and by which the demand under Rule 6(3) (i) of an amount of ₹ 95,51,744 /-along with interest on it under Section 11 AB has been confirmed and penalty of equal amount has been imposed, is depreciable, as the Tribunal had given a clear finding that there is no scope to ask the assessee to pay 5%/10% of the value of exempted goods and had specifically set aside the penalty and the final order and the Misc. Order of the Tribunal, as noted by the Commissioner in para -6 of her order had been accepted by the Committee of Commissioners. The order is in contumacious disregard of the Tribunal's directions, besides having been passed by totalling disregarding the Appellant's plea that during the period of dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s order to the Chairman, Central Board of Excise Customs for his information. 14. The aforesaid impugned order of the Tribunal has been challenged by the appellant in the present appeal on the following grounds as per memorandum of appeal: 1. That the Hon'ble CESTAT in the Final Order dated 09.02.2015 has grossly erred in holding that the benefit of Section 73 of the Finance Act, 2010 shall also be available for the period from April, 2008 to March, 2010 irrespective of the fact that- (A) The amendments were effective only for the period from 10.09.2004 to 31.03.2008 (both days inclusive), and (B) Only to those cases in respect of which a dispute relating to adjustment of credit on inputs or input services used in or in relation to manufacture of exempted final products relating to aforesaid period (10.09.2004 to 31.03.2008) (both days inclusive) were pending on the date on which the Finance Bill 2010 received the assent of the President of India (i.e. 08.05.2010). 2. That the Hon'ble CESTAT in the Final Order dated 09.02.2015 has grossly erred in allowing the benefit to the party irrespective of the fact that the party did not file any applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hane Municipal Corporation [119 (55) ELT 454 (SC)] has also held the same. 6. The order passed by the CESTAT in Para 14 of the Final Order dated 09.02.2015, including imposition of costs for ₹ 10,000/- on the adjudicating authority does not appear to be legal and proper in view of the facts and legal position narrated above and thus in view of the aforesaid facts and circumstances the order of the Hon'ble CESTAT seemingly being not legal and proper is liable to be set aside. 15. From the perusal of the grounds of appeal, we find that the following findings of fact recorded by the Tribunal in the impugned order have not been challenged by the appellant: (i) The Tribunal vide Final Order dated 27.02.2012 read with misc. order dated 11.06.2012 in respect of ROM application, has held that the appellant even for the period from April, 2008 to March, 2010, would be eligible for the benefit of Section 73 of Finance Act, 2010 and accordingly, would be liable to pay only an amount equal to the actual cenvat credit involved in respect of input or input service used in or in relation to the manufacture of exempted final products and the matter had been remanded to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eversal of cenvat credit in terms of Rule 6(3)(ii), merely on this ground the provisions of Rule 6(3)( i ) can not be forced upon the assessee when the assesse claim has been that during 2008-09 and 2009-10 period, they had not taken cenvat credit in proportion to the use of inputs/input services in relation to manufacture of exempted final products. (vii) In any case, when this issue had been decided by the Tribunal in the remand order and Tribunal had directed for determination of the amount payable under Rule 6(3) in proportion to the use of inputs/input services in or in relation to manufacture of exempted final products, the Commissioner in de novo proceedings could not go into this question again. The impugned order thus, besides being in contumacious disregard of the Tribunal's order also appears to be the outcome of a dishonest exercise of adjudication function. 16. We further find that neither there is any allegation in the memorandum of appeal nor it has been argued on behalf of the appellant that the findings of fact recorded by the Tribunal as afore-quoted, are perverse. The Tribunal being the last fact finding authority, its findings of fact cannot be inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority is of the view that the directions issued by the Court are contrary to statutory provision or well established principles of law, it can approach the same Court with necessary application/petition for clarification or modification or approach the superior forum for appropriate reliefs. We may note here that in the present case, as we have already noticed, the appellants have not questioned the final order of the Tribunal dated 27.02.2012, which order has attained finality. 22. In the case of Triveni Chemicals Limited vs Union Of India Anr, (2007) 2 SCC 503 (para-9), Hon'ble Supreme Court held it was obligatory on the part of the authorities concerned to comply with the order passed by the Collector (Appeals). The authorities were bound to do so in view of the doctrine of judicial discipline. 23. In the case of Union of India and others Vs. Kamlakshi Finance Corporation Ltd., 1992 Supp (1) SCC 443 (para-6), Hon'ble Supreme Court held the High Court has rightly criticised the conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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