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2022 (6) TMI 609 - Central Excise
Head Note / Extract:
Jurisdiction - power of Tribunal to review it s order - benefit of N/N. 29/89-C.E. dtd. 01.03.1989 - Applicability of benefit of Notification to Kerosene or not - classification of goods - classifiable under Chapter 2710.29 or under 2710.99 - case of appellant is that once it has been held and decided that the final products i.e. LABFS cleared by the Appellant to the manufacture of liner alkyl benzene (LAB) is classifiable under Chapter 2710.29 and not under 2710.99, the benefit of Notification No. 29/89-C.E. dated 01.03.1989 is available to the Appellant - levy of penalty - HELD THAT:- The present review application is filed by the applicant on the basis of Hon’ble Supreme Court order in INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER [2016 (4) TMI 929 - SC ORDER] and the Hon’ble apex court also held that “if such review petition is filed within a month’s time from today, the Tribunal is requested to decide those two abovementioned issues on merits, without reference to the period of limitation.” It is also noticed that as per the provision of the Central Excise Act, Tribunal has no power to review the order. However, it is well settled law that all subordinate courts/tribunals/authorities were bound by the decision of the Apex Court until it was reviewed or corrected by the same court. The decisions rendered by the Apex Court being the highest judicial fora are binding on all subordinate courts. However, this apex court order can also be considered as remand for deciding the issue on merit. Considering the said facts, we now decide the issues on merits related to applicability of Notification No. 29/89-CE dtd. 01.03.1989 and legality of penalty of Rs. 36,00,000/- under Rule 173-Q of the Central Excise Rules, 1994 addressed by the Hon’ble apex court. Whether the benefit of Notification 29/89-C.E. dtd. 01.03.1989 admissible to Applicant or not? - HELD THAT:- From the plain reading of above notification, it is clear that in above notification benefit was granted to the Kerosene falling under heading No. 27.10 of the Schedule of the Central Excise Tariff Act, 1985 (5 of 1986) intended for use in the manufacture of liner alkyl benzene or heavy alkylate. Clearly the above notification ibid is a conditional exemption notification, benefit of which is admissible subject to fulfillment of the conditions - Only product “Kerosene” falling under chapter heading 27.10 and consumed in the manufacture of linear alkyl benzene or heavy alkylate will be eligible for exemption under above Notification. Since the said factual position, related to conditions of notification cannot be ascertain at this stage specifically when the said issue was raised before the Tribunal first time. Now adjudicating authority must decide and verify the matter first whether products of applicant can be considered as “Kerosene“ for the purpose of above exemption notification and thereafter, verify the use of products for manufacture of liner alkyl benzene / heavy alkylate. As per observations, the first issue is disposed off by way of remand to the adjudicating authority for passing a fresh order in the above terms - Adjudicating authority should complete the remand proceedings within three months of the receipt of this order and the applicant shall be allowed adequate opportunity of hearing and submission before a fresh decision is taken. Levy of penalty - HELD THAT:- It is a settled legal position that in cases where issue involved is the classification dispute and interpretation of rules / law /exemption notification are involved, no penalty can be imposed. In the present matter no penalty is imposable upon the appellant under Rule 173Q of the Central Excise Rules 1944 as the applicant has not violated any Rules / provisions with intention to evade payment of duty. It is only a matter of difference of opinion regarding classification of goods between the applicant and by the department. Therefore penalty needs to be set aside - Further, since the Applicant are public-sector undertaking, the allegation of mis-statement, or suppression of fact or contravenes provisions of Rule with intent to evade the payment of duty can not be alleged. Appeal allowed in part and part matter on remand.