TMI Blog2022 (4) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... ant paragraphs of the order of adjudication dated 25.05.2004. A perusal of the said order shows that it is a speaking order and the Commissioner has assigned reasons as to why the proposal in the show cause notice should be dropped. Therefore, the department was wholly unjustified in not only issuing the show cause notice dated 30.04.2007 but also by preferring this appeal. In fact, this is a fit case where exemplary cost has to be imposed on the concerned official of the department for attempting to resurrect a settled issue. The Commissioner who issued the show cause notice dated 31.02.2004, after receiving the reply from the respondent assessee and after hearing the authorized representative in person by a speaking order dated 25.05.2004 dropped the proceedings. The department did not challenge the said order before the learned Tribunal. That apart, part of the period for which the show cause notice dated 30.04.2007 was issued overlaps the period covered in the earlier show cause notice dated 31.03.2004. Therefore, it can be safely concluded that the proceedings initiated in the year 2007, presumably after change of the Commissioner, were without any legal basis and can also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LE MR. JUSTICE T.S. SIVAGNANAM AND HON BLE MR. JUSTICE HIRANMAY BHATTACHARYYA Appearance:- Mr. Uday Shankar Bhattacharya, Adv. Mr. S. Seal, Adv. Mr. B. Bhattacharya, Adv.. .For the Appellant. Dr. Samir Chakraborty, Sr. Adv. Mr. Avra Mazumdar, Adv. Sudheshna Mazumdar, Adv. Binayak Gupta, Adv. ..For the Respondent. JUDGMENT (T.S.SIVAGNANAM, J.) 1. This appeal by the revenue filed under Section 35 G of the Central Excise Act, 1944 (the Act) is directed against the order dated 13.01.2020 passed by the Customs, Excise and Services Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata in Excise Appeal No. 444 of 2012. By the said order, the appeal filed by the respondent assessee was allowed by the Learned Tribunal. The appellant revenue has raised the following substantial questions of law for our consideration:- (i) Whether in absence of any evidence the entire findings of the Learned Tribunal is perverse in holding conclusively that the inputs which have not been received back by the respondent-assessee from the job workers, is waster and scrap only? (ii) Whether the value of the said non-returned inputs as adopted by the respondent-assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort payment of duty and this was on account of wilful suppression of facts with an intent to evade the Central Excise laws. The assessee was called upon to show cause as to why the excise duty amount should not be recovered under Rule 12 of the Credit Rules read with Section 11 A of the Act, why penalty equal to the Central Excise duty should not be imposed and recovered under Rule 13 of the Credit Rules read with Section 11 AC of the Act and why interest as applicable should not be charged under Section 11 AB of the Act. 2.2 The assessee submitted their explanation stating that in the manufacture of bearings, two types of raw materials are used namely steel tubes and steel bars and the bearings consists of an outer ring and an inner ring and these rings are carved out from the solid steel tubes and bars. The steel tubes and bars purchased by the assessee are sent to job workers for extracting the inner and outer rings and the bearing finally assembled in the assessee s factory at Kharagpur. The assessee also explained as to how they have adopted various standards so as to have better control over the manufacturing process at the job workers end as each type of tube and bar, bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m as waste and scrap from the job workers premises on payment of CE duty. On the other hand if such waste and scrap were to be returned to the factory, the same were then required to be removed from the factory on payment of appropriate CE duty. Hence, I observe that there is no loss of duty or evasion of duty on waste and scrap removed from the job workers end. As per rule 4(6) of CCR, 02. Even waste and scrap can be removed from the premises of the job workers. Hence it is not a case of evasion of duty as alleged in the SCN. I also observe that pipes and tubes of different sizes and shapes are the basic raw material required for the manufacture of ball and roller bearings. In the process of such manufacture the tubes and pipes are required to be cut into pieces and machined suitably to be converted into rings of different sizes and specifications. Such rings are further processed and fabricated to manufacture bearings. It is no practically possible to cut tubes and pipes into smaller pieces and machined suitably to manufacture rings without generating any waste and scrap. It is an impossible proposition to get back the entire tubes and pipes (raw materials) from the job ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice dated 30.04.2007. The allegations were identical to that of the show cause notice dated 31.03.2004 and the period also overlaps. The period covered in the show cause notice dated 30.04.2007 is from 2002-03 to 2005-06 (up to July 2005). Thus, the period between 2002 to July 2003 would overlap as it was the period for which the show cause notice dated 31.03.2004 was issued which show cause notice was dropped after adjudication. The assessee submitted their reply and the Commissioner by order dated 27.03.2012 confirmed the proposal in the show cause notice and determined the excise duty, levied penalty and interest. Aggrieved by the same, the assessee filed appeal before the Learned Tribunal. The Learned Tribunal after considering the facts of the case as also the earlier decisions of the Tribunal and more particularly the order of the Commissioner dated 25.05.2004 (quoted above) allowed the appeal. The revenue is before us challenging the correctness of the order passed by the Learned Tribunal. 3. We have elaborately heard the Learned Counsels Mr. Uday Sankar Bhattacharya assisted by Mr. S. Seal and Ms. B. Bhattacharya for the appellant and Dr. Samir Chakraborty, Seni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le despite the order of the Commissioner dated 25.05.2004. In fact, such a ground can never be taken because the department has accepted the order-in-original dated 25.05.2004 and allowed it to attain finality. Therefore, applying the principles of consistency, the order binds the department as the transaction is identical and there is no fresh materials available with the Commissioner justifying the issuance of the show cause notice dated 30.04.2007. Merely by stating that the earlier order of adjudication came to be passed without calling for any conclusive evidence cannot be a ground to ignore the earlier order of adjudication. Precisely for such reason, we had extracted the relevant paragraphs of the order of adjudication dated 25.05.2004. A perusal of the said order shows that it is a speaking order and the Commissioner has assigned reasons as to why the proposal in the show cause notice should be dropped. Therefore, the department was wholly unjustified in not only issuing the show cause notice dated 30.04.2007 but also by preferring this appeal. In fact, we are of the opinion that this is a fit case where exemplary cost has to be imposed on the concerned official of the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismissed as reported in Commissioner Versus Sivanesan Co. 2007 (211) E.L.T. A77 (S.C.). 7. In Radhasaomi Satsang Versus CIT (1992) 193 ITR 321 (S.C.), while considering the proceedings under the Income Tax Act, it was held that strictly speaking, res judicata does not apply to income tax proceedings as each assessment year being a unit what is decided in one year may not apply in the following year but, where a fundamental aspect permeating through the different assessment years and were found as a fact one way or the other and the parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. The Decision in Radhasaomi Satsang was applied in the case of Commr. of Central Excise and Customs Versus Mundra Port Special Economic Zone Ltd. 2011 (21) S.T.R. 361 (Guj.). 8. The above decisions would squarely apply to the facts of the case and in fact, the facts before us are much better and stronger than the facts in the decided cases referred supra. We say so because the Commissioner who issued the show cause notice dated 31.02.2004, after receiving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f limitation on the plea of suppression of facts by the assessee cannot be issued as the facts were already in the knowledge of the department. It was observed in para 14 as follows: 14. We have indicated above the facts which make it clear that the question whether M/s. Pharmachem Distributors was a related person has been the subject-matter of consideration of the Excise authorities at different stages, when the classification was filed, when the first show cause notice was issued in 1985 and also at the stage when the second and the third show cause notices were issued in 1988. At all these stages, the necessary material was before the authorities. They had then taken the view that M/s. Pharmachem Distributors was not a related person. If the authorities came to the conclusion subsequently that it was a related person, the same fact could not be treated as a suppression of fact on the part of the assessee so as to saddle with the liability of duty for the larger period by invoking proviso to Section 11A of the Act. So far as the assessee is concerned, it has all along been contending that they were not related person, so, it cannot be said to be guilty of not filling up th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant cannot be sustained. When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second the third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. We agree with t he view taken in the aforesaid judgments and respectfully following the same, hold that there was no suppression of facts on the part of the assessee/appellant. 10. Furthermore, on perusal of the show cause notice dated 30.04.2007, we find that there is no allegation against the respondent assessee of wilful suppression or mis-statement though the words wilfully suppressed has been used in one place in the show cause notice. Mere use of the words or expression wilfully suppressed with intend to avoid duty cannot hold the assessee guilty of wilful suppression. The same has to be established by the department by pointing out as to on what basis they have come to the prima facie conclusion that there has been wilful mis-statement or suppression of facts. Therefore, mere use of the said words and expression cannot valida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit on the raw materials used and when the raw materials are used finished product emerges and along with the finished products waste is generated and this waste is removed on the payment of duty. Therefore, it is submitted that if a product is removed on payment of duty, the input credit can legally be availed and there is no requirement of reversing the Cenvat Credit on a product which was cleared on payment of duty. In support of such contention reliance was placed on the decision of the learned Tribunal in Tulsyan NEC Ltd. Versus Commissioner of Central Excise, Bangalore-II 2008 (225) E.L.T. 65 (Tri.- Bang.) and Commissioner of Central Excise, Hyderabad-III Versus Allwyn Auto Ltd. 2004 (178) E.L.T. 693 (Tri.- Bang.). As observed the earlier, we are satisfied that the initiation of the proceedings by the Commissioner commencing to the issuance of the show cause notice was illegal. We have also considered the binding effect of the order of adjudication dated 25.05.2004 which has attained finality. Therefore, for such reason we have left substantial questions of law Nos. 3 and 4 open for consideration in an appropriate case. Hence, we are not expressing any opinion on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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