TMI Blog2019 (2) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... nch in the case of M/s.Resolute Electronics Private Limited Vs. Union of India [2015 (4) TMI 422 - ANDHRA PRADESH HIGH COURT] and in the case of Star Enterprises Vs. Joint Commissioner, Guntur [2015 (4) TMI 40 - ANDHRA PRADESH HIGH COURT] require reconsideration. In the decision in the case of Electronic Corporation of India Limited, the first question was answered against the assessee thereby holding that the period of limitation provided under Section 35 of the Act can be extended only upto 30 days as provided by the Proviso and it cannot be extended beyond 90 days. Statutory remedy or appeal under Section 35 of the Act - Held that:- Admittedly, the assessee, while responding to the show cause notices, which we find as periodical notices, did not specifically canvass the issue, which they raised in the writ petitions namely challenging the jurisdiction of the Authority to impose equal penalty for the period from March 2008 to March 2010. Secondly, the assessee did not raise the contention, which was raised in the writ petitions stating that equal penalty could not have been imposed for the period from 01.4.2010 to 31.1.2015 since there is no allegation in the show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was a demand for interest as applicable under Rule 14 of the Rules read with Section 11AB/11AA of the Act and equal penalty was also imposed as that of the central excise duty under Rule 15 of the Rules. 4. As against the said common Order-in-Original dated 29.2.2016, the assessee preferred appeals before the Commissioner of Central Excise (Appeals-II), Chennai [for short, the CCE(A)]. Admittedly, the appeals were filed beyond the period of limitation and there was a delay of 121 days in filing the appeals. The law relating to the power of the CCE(A) to condone the delay having been settled in various decisions, the CCE(A), vide common order dated 21.9.2016, held that he has no power to condone the delay in filing the appeals. 5. The assessee carried the matter on appeal to the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai (for short, the Tribunal), canvassing the merits of the matter as to how the demand made in the show cause notices containing various dates starting from 31.1.2008, as affirmed in the said common Order-in-Original dated 29.2.2016, is not sustainable. Further, the assessee also referred to the affidavit filed by their cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deals with situations warranting penalty for irregular availment of CENVAT credit availed in respect of inputs, capital goods and input services by both the manufacturer and the service provider, that invocation of proper Sub-Rule of the said Rule is mandatory in order to impose penalty on a manufacturer or a service provider, that the assessee being a manufacturer, the only applicable Sub-Rule upto 31.3.2010 is Sub-Rule (3) of Rule 15 of the Rules, under which, penalty cannot exceed ₹ 2,000/- and that there is no separate provision for cases involving fraud, suppression, etc. 10. It was further contended by the assessee before the learned Single Judge that for the period upto 31.3.2010, there is no provision to impose equal amount of penalty on a manufacturer for wrongly availing any credit on input services irrespective of the issue as to whether any fraud or suppression is involved or not. Challenging imposition of equal amount of penalty under Rule 15 of the Rules, the assessee contended that the first respondent clearly exceeded in jurisdiction vested upon him under Rule 15(3) of the Rules as it stood then by imposing equal penalty for the period from 01.3.2008 to 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeals filed by the assessees therein were only upto the Tribunal and they were dismissed as time barred. However, in the case of the assessee herein, the appeals filed before the Division Bench of this Court were dismissed confirming the orders of the First and Second Appellate Authorities and this is a distinguishing feature in the case of the assessee herein. After noting the decisions in the case of Electronic Corporation of India Limited and in the case of Panoli Intermediate (India) Private Limited, the learned Single Judge observed that even going by the said decisions, the assessee has to satisfy that their case would fall under any of the following categories namely the Adjudicating Authority lacks jurisdiction or acted in excess of jurisdiction or in violation of principles of natural justice. Further, the learned Single Judge noted that the assessee had challenged the common order of the Adjudicating Authority on merits and not on any of the grounds indicated by the decisions in the case of Electronic Corporation of India Limited and in the case of Panoli Intermediate (India) Private Limited. 15. With regard to the power to impose equal penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions of the Division Bench in the case of M/s.Resolute Electronics Private Limited Vs. Union of India [reported in (2015) 319 ELT 51 (AP)] and in the case of Star Enterprises Vs. Joint Commissioner, Guntur [reported in (2016) 41 STR 20 (AP)] require reconsideration. By these decisions, the Division Bench of the Andhra Pradesh High Court held that a writ petition under Article 226 of The Constitution of India would not lie against an Order-in-Original passed under the Act once the statutory remedy of appeal against the said order stood foreclosed by the law of limitation. 19. The facts in the case on hand are identical to the facts of the cases, which were the subject matter of reference before the Hon'ble Full Bench of the Andhra Pradesh High Court. Ultimately, the Hon'ble Full Bench of the Andhra Pradesh High Court in the decision in the case of Electronic Corporation of India Limited, after taking into consideration the decision of the Hon'ble Full Bench decision of the Gujarat High Court in the case of Panoli Intermediate (India) Private Limited, answered the three questions framed for consideration in the following manner : The Full Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Article 226 can be preferred for challenging the order of the Adjudicating Authority under three circumstances, the first of which being that the Authority, who passed the order, did so without jurisdiction or assumed jurisdiction. Secondly, he exercised powers in excess of jurisdiction and by overstepping or crossing the limits of jurisdiction. Thirdly, he acted in flagrant disregard to the Rules or the procedure or acted in violation of the principles of natural justice where no procedure is prescribed. Resultantly, there is a failure of justice or it has resulted into gross injustice. 22. Thus, we are required to see as to whether the assessee has brought their case within anyone or more of the circumstances as pointed by the Hon'ble Full Bench of the Andhra Pradesh High Court in the case of Electronic Corporation of India Limited. Identical view was taken by the Hon'ble Full Bench of the Gujarat High Court in the case of Panoli Intermediate (India) Private Limited. 23. Admittedly, the assessee, while responding to the show cause notices, which we find as periodical notices, did not specifically canvass the issue, which they raised in the writ petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f which any contravention has been committed, or two thousand rupees, whichever is greater. (2) In a case, where the CENVAT credit in respect of input or capital goods has been taken or utilized wrongly on account of fraud, willful misstatement, collusion or suppression of facts, or contravention of any of the provisions of the Excise Act or the Rules made thereunder with intention to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in terms of the provisions of Section 11AC of the Excise Act. (3) If any person takes CENVAT credit in respect of input services wrongly or in contravention of any of the provisions of these Rules in respect of any input service, then, such person shall be liable to a penalty which may extend to an amount not exceeding two thousand rupees. (4) In a case, where the CENVAT credit in respect of input services has been taken or utilized wrongly by reason of fraud, collusion, willful misstatement, suppression of facts, or contravention of any of the provisions of the Finance Act or of the Rules made thereunder with intention to evade payment of service tax, then, the provider of output service shall also be lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which was in vogue till 31.3.2010, states that if any person takes CENVAT credit in respect of input services wrongly or in contravention of any of the provisions of the Rules in respect of any input service, then, such person shall be liable to a penalty which may extend to an amount not exceeding ₹ 2,000/-. After amendment with effect from 01.4.2010, the said Rule contemplates levy of equal penalty where the CENVAT credit in respect of input or capital goods or input services has been taken or utilized wrongly by reason of fraud, collusion, willful misstatement or suppression of facts, etc., with intent to evade payment of service tax. 29. Thus, for the period from 01.4.2010, mens rea requires to be established to impose equal penalty. In our considered view, the issues as to whether equal penalty was imposable or in other words, whether the Adjudicating Authority had jurisdiction to impose equal penalty for the period prior to 31.3.2010 and as to whether facts warranted imposition of equal penalty for the period from 01.4.2010 are definitely issues touching upon the jurisdiction of the Authority to take a decision in the matter. Therefore, we are fully convinced that ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
