TMI Blog2009 (6) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... , - Dated:- 10-6-2009 - S/Shri D.N. Panda, Member (J) and Rakesh Kumar, Member (T) S/Shri S.K. Bagaria, Sr. Advocate with Rohit Chaudhary, Advocate, for the Appellant. S/Shri K.K. Goel, JCDR with Sumit Kumar, SDR, for the Respondent. [Order per: D.N. Panda, Member (J)]. - When this matter came for hearing of the Stay Application on 5-6-09, there was an objection of the Revenue that the appeal memo and the stay application were not signed by the principal officer of the appellants. To this objection based under Rule 8(3) of the CESTAT (Procedure) Rules, 1982, we granted an opportunity to the appellant to remove the defect since we felt that this is a curable defect. Both sides agreed to that and took notice. Accordingly, we directed to call the matter today that is on 10-6-2009. 2. When this matter reached today for hearing, ld. Counsel submitted that defect has been removed and manner of removal has been stated by an affidavit. It has been stated therein that the signatory Shri Ashok Kumar Sharma is the General Manager (Accounts) of the appellant and he was duly authorized to sign, verify and file the appeal memo as well as Stay application on behalf of the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CESTAT (Procedure) Rules, 1982. The Ld. Sr. Counsel repells such an argument submitting that Central Excise Act, 1944 being a self contained code and having its own provisions, litigations under that law shall be guided by the set of provisions contained in that law. Ld. DR further submits that right of appeal being conditional; the appellant should not get any consideration before this forum without fulfilling requirement of CESTAT (Procedure) Rules, 1982. In support of his contention, he relies on the decision of the Apex Court in the case of Vijay Prakash D. Mehta v. Collector of Customs reported in 1989 (39) E.L.T. 178 (S.C.). So also he relies on the Tribunal's decision in the case of Philips India Ltd. v. Commissioner of Central Excise, Mumbai reported in 2003 (154) E.L.T. 234 (Tri.-Mumbai). He places meaning of "principal officer" from para 3 of the decision. According to him, the "principal officer" has been defined under the Companies Act, 1956. That term should get the same meaning under Excise Law. The Ld. Sr. Counsel is totally in disagreement with such proposition submitting that when there is no definition of any term called "principal officer" under the Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter in controversy, this sub-rule does not assist. Therefore, we divert ourselves to sub-rule (2). The sub Rule (2) says that the memorandum of appeal, cross objections, reference applications or any other Miscellaneous application are required to be typed in double line spacing on the fool-scape paper. This sub-rule intends that above documents should be paged, indexed and tagged firmly. These two sub-rules are only stating about the format of the appeal memorandum and stay application. Therefore, we proceed to sub-rule (3). This sub-rule (3) prescribes procedure dealing with the manner of signing of the Memorandum of Appeal/Application/Cross-Objection for authentication and verification. This sub rule requires that the documents stated therein should be signed and verified either by the appellant, applicant, respondent or a principal officer duly authorised as the case may be. This particular sub-rule calls for interpretation of the term "appellant, "applicant", "respondent" and "principal officer". When we look into the manner how this sub-rule has been designed, this throws light that the word "or" is used at the end of the words appellant/ applicant/ respondent to mean that 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statutes are fiscal statutes. Accordingly, Board Resolution passed in a duly convened meeting and duly authorising a person in that resolution may authorise that person to authenticate the document on behalf of the copy. The word "duly" used in sub-rule (3) of Rule 8 is that a person who signs any of the three types of documents referred to in that rule must have been authorised prior to his signature on these documents. Not only such authorisation has been given but also by proper authority. 11. In the light of our aforesaid discussion when we take page 5 of the affidavit into consideration, we find that the appellant had intended to be represented by its authorised signatory. That authorised signatory has also been permitted by a Board Resolution. We are of the firm belief that the appellant has satisfied the requirement of law. 12. In view of our aforesaid discussions, we over rule the objection of the Revenue as to maintainability of appeal and stay application. While doing so, also we notice that the term "principal officer" has not been defined under Central Excise Act, 1944 or Central Excise Rules, 1944. In the absence of any meaning to this term under this law the "pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is most reasonable to prescribe the valuation should be followed. Thus he submits that rule 11 has made provision to this effect. According to him, Rule 11 though is a residuary rule, that does not rule out a case to be governed in terms of procedure of Rule 3 to Rule 10. If a particular modality of valuation does not fall under any of the rules beginning from 3 to 10, that shall fall under rule 11. Even if the goods fall under Rule 11, the value shall be determined using reasonable means, not departing from the basic provisions made in Rule 4. Therefore, he brings to our notice as to the legislative mandate of Rule 4 which reads as under:- "Rule 4: The value of the excisable goods shall be based on the value of such goods sold by the assessee for delivery at any other time nearest to the time of the removal of goods under assessment, subject, if necessary to such adjustment on account of the difference in the dates of delivery of such goods and of the excisable goods under assessment, as may appear reasonable." Reading rule 4, ld. Counsel submits that this rule prescribes the normal circumstances of removal subject to adjustment on account of different factors. Therefore, when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory (captive consumption) or (b) where such goods are transferred to another factory for consumption in the manufacture of other articles on behalf of the assessee. In this case, it is not the case of the revenue that the goods were transferred to other units for manufacture of other articles on behalf of the assessee/ appellant, i.e. the Dolvi Unit. We agree with the assessee's contention that the expression 'assessee', wherever it appears in the Central Excise Rules, applies to a particular factory, which is why different units belonging to one company are separately registered and separately assessed to duty. Since the assessee in the present case is the Dolvi plant and it is not the revenue's case that the other three units of the company to whom HR coils were transferred were undertaking further manufacturing operations on behalf of the Dolvi Unit, the provisions of Rule 8 will not apply. We, therefore, hold that Rule 8 is inapplicable in the instant case." 17. He further proceeded to rely on the decision of the Delhi Bench reported in the case of CCE, Chandigarh v. Pfizer Ltd. reported in 2008 (231) E.L.T. 642 (Tri.-Del.). Again he relies on the decision of Kolkata Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph 2, the authorities conceived that for the years 2004-05, 2005-06 and 2006-07 the appellant had partly sold its excisable goods manufactured by it to outside independent customers and partly consumed captively. This aspect remained uncontroverted even at the stage of adjudication. Page 45 of the appeal folder, exhibiting para 2 of the Order-in-Original such fact was subject matter of consideration. Ld. Authority for no rhyme or reason referred the matter to Cost Audit. The Cost Audit report dated 3-7-06 apparent from para 9 of the show cause notice was against the appellant. Therefore, the appellant made representation to the authorities for which the authorities required the Cost Auditor to clarify the issue. A communication dated 24-4-2007 was issued by the authorities to the Cost Auditor. That Cost Auditor by letter dated 20-4-07 asked this appellant to produce the record for answering the question of revenue. When the answer from the Cost Auditor came, without confronting the said Auditor's report, the appellant was dealt by the Order-in-Original while there is no doubt that Cost Audit Report was the basis for adjudication. When the original report was considered to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be brought to light and copies thereof, should be supplied to the Appellant for appropriate defence plea. There is no doubt that merely six years have elapsed after the search was conducted. But the matter calls for remitting back to learned Adjudicating Authority in view of the allegations and counter-allegations of the parties at para 4.2 of the Order of Adjudication in respect of opportunity of hearing and also supply of copies of the documents. The plea of the Department that there was a reasoned and speaking Order passed by learned Adjudicating Authority cannot be appreciated without a defence reply. Once the aggrieved feels that its defence founded on the number of documents, facts and circumstances as well as the legal provisions, the Department cannot press its foot to cross the legal defence or the documentary evidences available to the aggrieved. It is fully the choice of the aggrieved to raise all defences, which are available to him under the law and learned Authority of the Department would only consider the defences and reject the same, if the same are not in accordance with law or are based on mis-construction of the factual aspect or mis-conception of law. When ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorities were aware of all the facts, there is no question of any intention to evade and proviso to section 11A of the Central Excise Act, 1944 shall not be invokable to the case of the appellant. He reads para 11.3 of the Order-in-Original in respect of levy of penalty. In that paragraph also essential ingredients of proviso to section 11A does not appear. Therefore, he sharply submits that neither the show-cause-notice nor Order-in-Original having brought out the elements of the proviso to section 11A of Central Excise Act, 1944, the appellant cannot be penalized nor also demanded any duty. But he fairly submits that if at all Rule 8 of the aforesaid rules applies, revenue had the opportunity to scrutinise transactions of the Appellant without any fact suppressed. With the aforesaid 3 principal challenges, ld. Sr. Counsel prays that there shall be total waiver of pre-deposit during pendency of the appeal. While submitting so, he seriously draws our attention to the principle laid down by the Hon'ble High Court of Calcutta in the case of M.S. Naina v. CC, West Bengal Calcutta-1 reported in 2000 (123) E.L.T. 39 (Calcutta). He relies on para 14 of the judgment of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tness in the absence of a summons from the adjudicating authority, the Collector refused to issue the summons prayed for only on the ground that the witness cited being a defence witness no summons need be issued. In my view, such an order was passed in an obvious disregard of the Collector's obligation under section 108 of the Customs Act, 1962. Section 108(1) is in following terms:- "Any gazetted officer of customs was for power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in an enquiry which such officer is making in connection with the smuggling of goods". 22. Ld. Sr. Counsel submits that violation of principles of natural justice is not a curable defect. Even that cannot be cured at the appellate stage. Therefore, the appellant may not have grievance in future for the impugned period if the matter is decided on the touch stone of law laid down by various precedents cited today, granting fair opportunity of hearing to the appellant. When the appellant's case was not a case of Rule 8 and that has been categorically observed in the show-cause-notice as well as Order-in-Original, the authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot sold, be the value determined in such manner as may be prescribed. 23. Ld. JCDR submits that when the goods are not sold whether fully or partly those cases fall under Section 4(1)(b) of Central Excise Act, 1944. The modality of valuation is to be done in the prescribed manner. The manner is stated by Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. According to the rules, the goods sold partly to no unrelated persons and price is the sole consideration, that shall fall under category envisaged by Section 4(1)(a). This he says relying on the terms "each removal" appearing in the beginning of sub-section (1) of Section 4. Therefore, revenue has scope to construe that each removal should be subject matter of test under the law without any wholesale test. This is because each removal shall be governed according to the terms of removal as well as law. Each removal being subject matter of test in the manner prescribed by law, each such removal shall be dealt according to the letters of the law. Therefore, whenever the appellant claim that a removal amounting to sale, the appellant shall submit its goods for determination of assessable value under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that the appellant has no case on merits in view of 3 decisions which are placed as under:- (i) UCAL Machine Tools Ltd. v. CCE, Chennai - 2008 (223) E.L.T. 647 (Tri.-Chennai) (ii) BOC India Ltd. v. CCE, Jamshedpur - 2004 (168) E.L.T. 478 (Tri.-Kolkata) (iii) Nirma Ltd. v. CCE, Vadodara-I reported in 2006 (200) E.L.T. 213 (Tri.-Mumbai) 25. Ld. JCDR submits that the requirement of the Circular of the Board was not dealt by the Larger Bench decision at page 31. To this submission, ld. Sr. Counsel submits that there is nothing new about the Circular which was not dealt by the Larger Bench decision. This is apparent from para 2 of the Larger Bench decision. Larger Bench has also dealt the same in para 4. Therefore this argument is nothing new for revenue today when para 4 decided the matter long ago. In that para also Rule 9, Rule 8 and Rule 4 were subject matter. Considering entire aspect, Tribunal has finally decided that in the case of no sale but used for captive consumption, Rule 8 shall apply. Therefore, revenue cannot take new stand today bringing an argument on the same Circular. So also when the Larger Bench decision is neither reversed nor stayed by the Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d but used for captive consumption that shall fall under Rule 8. This raises doubt. We have gone through various precedents of past. This Tribunal has interpreted that when a part of the goods are used for captive consumption, the appellant shall fall under Rule 4. We have no hesitation to follow the judicial precedents and judicial discipline but the law not being static, a dynamic approach is also possible with the light of further developments and also with the aid of rule of interpretation. An insight to Rule 8 throws light that part of the goods not sold but going into captive consumption may be taken care by that Rule to that extent of captive consumption. If the rule is interpreted so, the goods those which are sold will certainly attract a different rule for valuation. It appears that Boards Circular has also tried to bring a classification by usage criteria. But to what extent Board's circular is within the ambit of Section 4 and Rule 8 that needs a test read with Section 4 of Central Excise Act, 1944. 30. We are satisfied that the appellant appears to have a case on the principles of natural justice. This compels us to send the matter for grant of an opportunity of hear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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