TMI Blog2004 (11) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... eld in appeal vide order dated 9.4.2003 (Annexure No.5) from which the appeal arose before the CESTAT and thus it was not open for the respondent to question the dutiability of bought out items in the appeal arising out of execution order? 2. Whether the dutiability of bought out items in the manufacture of plant and equipment under Section 2(f) read with Section 3 of the Act falling under Chapter sub-heading No.8479.90 of Central Excise Tariff Act 1985 having been decided vide order in original dated 14.5.1999 (Annexure No.2) following/referring the judgment of Hon'ble Supreme Court in the case of Narne Tulman Manufacturing (P) Ltd. v. CCE (1989 Vol 38 ELT 566 SC) and Sirpur Paper Mills Ltd. v. CCE (1998 Vol 97 ELT 3 - SC), has achieved finality in view of the unchallenged order of Commissioner (Appeals) dated 22.3.2000 (Annexure no.3) and thus it was no longer open for the respondent to question the dutiability in the appeal before the CESTAT arising out of the consequential order dated 31.10.2001 (Annexure No.4) quantifying the demand passed by the Deputy Commissioner, Central Excise, Division-I, Noida? 3. Whether the CESTAT has committed a manifest error of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , thus, became immovable and cannot be held to be excisable goods. It also raised a plea of limitation that the demand is barred by time. The Assistant Commissioner, Central Excise, Division I, Noida, vide order dated 14.5.1999 confirmed the demand of Rs.94,03,500/-. Feeling aggrieved, the respondent preferred an appeal before the Commissioner (Appeals), Custom and Central Excise, Ghaziabad. The Commissioner, vide order dated 22.3.2000, had held that the process of assembly and erection of plant at site manufactured by the appellant with bought out items supplied directly at site amounts to manufacture of a distinct new commercial article and chargeable to duty under the Act and the Rules. He did not disturb the findings of the Assistant Commissioner in this regard. However, he remanded the matter to the Assistant Commissioner to redetermine the quantum of duty actually due after giving an opportunity to the appellant. The relevant portion of the order of the Commissioner (Appeals) is reproduced below:- "I have examined the case and have considered the submission put forth before me. I find that the issue regarding dutiability of plant machinery assembled/erected at site has now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission of supportive documents clearly indicated that no new figures/facts are available with the respondent in support of their contention and, therefore, he confirmed the demand of Rs.94,03,500/- as duty on the portion of bought out items on which no duty was paid by the respondent. Feeling aggrieved, the respondent preferred an appeal before the Commissioner (Appeals), Custom and Central Excise, Noida. Before the Commissioner, personal hearing was given on 4.2.2003 before whom it was contended that no duty is leviable on bought out items. On the question of quantification, it was contended that their liability without admitting would be only of Rs.23.56 lacs as they would be entitled to MODVAT Credit on the duty paid on bought out items. The Commissioner (Appeals) did not go into the question of liability of the duty on bought out items. He did not accept the plea regarding entitlement of MODVAT Credit on the ground that the prescribed procedure has not been followed. Consequently, he confirmed the order passed by the adjudicating authority. Still feeling aggrieved, the respondent preferred an appeal before the Custom Excise and Service Tax Appellate Tribunal. Before the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of assessment in respect of bought out items supplied directly at the site is involved, the appeal, if any, lies before the Hon'ble Supreme Court under Section 35L of the Act and, therefore, the present appeal is not maintainable. In support of his preliminary objection, he has relied upon the following decisions:- (i) Union of India v. Auto Ignition Ltd., 2002 (142) ELT 292 (Bom); and (ii) Colour Chem Ltd. v. Union of India , 1998 (98) ELT 303 (Bom) against which the Special Leave Petition filed by Union of India has been rejected by the Apex Court reported in 1998 (104) E.L.T. Capital A 137 (SC). The learned Standing Counsel, however, submitted that the present appeal is confined only to the question as to whether the respondent could have raised/agitated the matter regarding dutiability of the goods before the Tribunal when it had not challenged the order of remand passed by the Commissioner (Appeals) holding that the duty is leviable on such bought out items and which order has become final. He, therefore, submitted that the present appeal does not raise any question regarding the rate of duty of excise or to the value of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashpal Dhir, (1992) 4 SCC 683. 7. The learned counsel for the respondent, however, submitted that non-filing of the appeal against the order passed by the Commissioner (Appeals) dated 22.3.2000 is not a bar and the respondent is well within its right to challenge the dutiability of bought out items before the Tribunal. According to him, in view of the decision of the Apex Court in the case of Hindustan Lever Ltd ., such a plea has rightly been entertained by the Tribunal as throughout the entire proceeding it had been contended that no duty is payable on bought out items which were supplied directly to the site of the customers. On merits, he submitted that no duty is payable on bought out items as the erection and commissioning was not undertaken by it but was entrusted to another identity, M/s K.S. Krishnan Associates Pvt. Ltd. The respondent was not manufacturer of bought out items and it had already paid duty on such bought out items. In support of his aforesaid submissions, he has relied upon the following decisions:- (i) Collector of Central Excise, Indore v. Hindustan Lever Ltd., 2000 (120) ELT 3 (SC); (ii) Satyadhyan Ghosal and others v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is for a purpose. It is not an empty formality. Classification of the goods manufactured by the assessee is important for the purpose of levy and collection of excise duty. In paragraph 10 of the report, the Apex Court has held as follows:- "10. Coming to the question that is raised there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing his order. If this position is accepted then the provisions for adjudication in the Act and the Rules will lose their relevance and the entire exercise will be rendered redundant. This position, in our view, will run counter to the scheme of the Act and will introduce an element of uncertainty in the entire process of levy and collection of excise duty. Such a position cannot be countenanced. The view taken by us also gain support from the provision in sub-ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal and directed the original authority to consider afresh the claim for deduction in accordance with law. On remand, the original authority again disallowed some of the deductions claimed by it including the deduction in regard to damages. Having failed in appeal before the Appellate Authority, i.e., the Commissioner (Appeals), it approached the Tribunal once again and the Tribunal allowed the appeal relying on its judgment in Assam Valley Plywood Pvt. Ltd. and Tungbhadra Industries Ltd. and held that discount should be allowed in regard to the value of compensation paid to be buyers in lieu of damages caused to goods during transit depending on the nature and extent of damage. The order of the Tribunal was challenged in appeal filed before the Apex Court. Before the Apex Court, learned counsel appearing for Hindustan Lever Ltd. raised a preliminary objection that the Collector of Central Excise should not be permitted to question the finding of the Tribunal as to the taxability of the damage discount because this question was finally adjudicated and decided by the Tribunal in the first round of litigation between the parties and the Collector of Central Excise, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .R. II I.A. 37, Forbes v. Ameeroonissa Begum, (1865) 10 M.I.A. 340 and Sheonath v. Ramnath, (1865) 10 M.I.A. 413, the Apex Court has held as follows:- "It is clear therefore that an interlocutory order which had not been appealed from either because no appeal lay or even though an appeal lay an appeal was not taken could be challenged in an appeal from the final decree or order. A special provision was made as regards orders of remand and that was to the effect that if an appeal lay and still the appeal was not taken the correctness of the order of remand could not later be challenged in an appeal from the final decision as in the cases of other interlocutory orders. The second sub-section did not apply to the Privy Council and can have no application to appeals to the Supreme Court, one reason being that no appeal lay to the Privy Council or lies to the Supreme Court against an order of remand." 16. In the case of Preetam Singh (supra) the Apex Court has held as follows :- "6. When the matter was in revision before the Assistant Director of (Consolidation), he had the entire matter before him and his jurisdiction was unfettered. While in seisin of the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it hears the matter in appeal. We are of the considered opinion that the same principle cannot be extended to a Tribunal which is not a Court. As held by the Apex Court in the case of Flock (India) Pvt. Ltd. (supra) if an order passed by an adjudicating authority is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing his order. The provision of appeals in the Act and the Rules will loose their relevance and the entire exercise will be rendered redundant. The position will run counter to the scheme of the Act and will introduce an element of uncertainty in the entire process of levy and collection of excise duty and such a position cannot be countenanced. The principle laid down by the Apex Court in the case of Satyadhyan Ghosal and Preetam Singh (supra) is also not applicable in the present case. It is not a case of interlocutory order nor it is a case where the Tribunal has any suo mot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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