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2016 (5) TMI 674 - KARNATAKA HIGH COURT

2016 (5) TMI 674 - KARNATAKA HIGH COURT - 2016 (344) E.L.T. 148 (Kar.) - Delay in filing an appeal before the Commissioner (Appeals) - Section 35 of the Act - Condonation of delay of 118 days - Writ jurisdiction under Article 226 of the Constitution - Held that:- If the two aspects, one, regarding the case law prevailing earlier and two, interpretation of the word "as such" and thereafter, the amendment and the decision of this Court, in case of CCE v. Solectron Centum Electronics Ltd.[2014 (10) .....

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it would be an appropriate case to exercise power under Article 226 of the Constitution to interfere with the order of the first appellate authority and to direct the first appellate authority to consider the matter in light of the observations made by this Court in the present order as well as after giving opportunity of hearing the appellant herein. - Therefore, the absence of consideration of the case of the appellant by the first appellate authority has resulted in a failure of justice .....

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ercise of the power under Article 226 of the Constitution, the Court may ensure that no litigant or the assessee takes any undue benefit of the power under Article 226 of the Constitution. If the case is considered in favour of invoking the appellate power, the requisite condition would be to deposit 7.5% of the duty demanded. Further, it cannot be said that the appellant was vigilant about its right to pursue the matter in time and there is delay also in filing this appeal. If the appellant has .....

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back - Decided in favour of appellant to some extent - WRIT APPEAL No.1065/2014 (T-TAR) - Dated:- 29-3-2016 - JAYANT PATEL AND MRS. B.V. NAGARATHNA, JJ. FOR THE APPELLANT: RI: A. SHANKAR, ADVOCATE WITH SMT. ANUPARNA BARDOLOI FOR M/S. SHETTY & HEGDE ASSOCIATES FOR THE RESPONDENT: SRI: JEEVAN J. NEERALGI, STANDING COUNSEL FOR R1-R3) ORDER Jayant Patel, J. - Heard. Admit. 2. Mr. Jeevan J. Neeralgi, learned standing counsel appears for respondents and waives notice. 3. With the consent of learn .....

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-, being an amount equal to cenvat credit availed on two plastic moulding machines, which were leased out to M/s. Reliance Moulded Furniture. Appellant submitted a reply on 24/08/2007 to the show-cause notice and had also tendered written submissions. On 02/04/2012, the Additional Commissioner of Central Excise, Bangalore, passed an Order-in-Original No. 27/2012 whereby, the demand of cenvat credit of ₹ 31,68,000/- was confirmed and the penalty was also imposed on ₹ 31,68,000/-. Acco .....

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ched on 02/05/2012 and the acknowledgement was also received. On 10/12/2012, as per the appellant, the copy of the Order-in-Original was received by it. The appellant being aggrieved by the said order carried the matter before the appellate authority and filed the appeal on 31/12/2012. On 28/02/2013, the appellant was communicated by the Superintendent of Central Excise, Appeals, Unit-I, that the appeal was required to be filed within a period of sixty days but the same has not been filed and su .....

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appellate authority communicated to the appellant that the decision has already been taken earlier and communicated vide letter dated 28/02/2013. On 18/04/2013, the appellant being aggrieved by the aforesaid decision, preferred W.P. No.18255/2013 before this Court and prayed for setting aside of the communication dated 28/02/2013 issued by the first respondent and the prayer was made to direct the respondent to consider the appeal filed by the appellant, challenging order dated 02/04/2012 passed .....

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013, learned Single Judge of this Court by the impugned order found that the statutory appeal was preferred beyond the outer limit prescribed under the statute and therefore, dismissed, the order calls for no interference. Under the circumstances, the present appeal is filed before this Court. 6. We have heard Mr. A. Shankar, learned counsel appearing for appellant and Mr. Jeevan J. Neeralgi, learned standing counsel appearing for respondents. 7. As such, in our view, the matter may arise for co .....

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rat)(LB). In the said decision, in view of the disagreement expressed by a later Division Bench of the High Court of Gujarat, the matter was referred to the Larger Bench for considering the questions which are reproduced in the beginning of the judgment. For ready reference, the same are reproduced as under:- "(1) Whether the period of limitation provided of 60 days, for filing an appeal under Section 35 of the Central Excise Act, 1944, could be extended only up to 30 days as provided by th .....

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w of limitation whether in a Writ Petition under Article 226 of the Constitution of India, the order passed by the original adjudicating authority could be challenged on merits?" 2. As such, the background of the matters are that the petitioner of SCA No. 18542/14 had preferred appeal before the Customs, Central Excise & Service Tax Appellate Tribunal (Ahmedabad), against the order passed by the Commissioner of Central Excise (Appeals), which arose from the order passed by the adjudicat .....

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r referred to as the "Act") the delay cannot be condoned beyond the period of 90 days, i.e., 60 days being the prescribed period and further discretion to condone the delay in 30 days. But the learned counsel for the petitioner placed reliance upon the another decision of the Division Bench of this Court in the case of Amitara Industries Ltd. v. Union of India decided on 30.01.2013 passed in SCA No. 6069/11 and contended that as per the view taken in the said decision, the delay can be .....

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t may be recorded that when SCA No. 13530/14 came up before the another Division Bench of this Court, it was brought to the notice of the said bench that the question involved in the petition for the period of limitation has been referred to the Larger Bench in SCA No. 18542/14. Under the circumstances, the said SCA No. 13530/14 has been listed before the larger bench simultaneously." After considering various decisions, the questions have been answered by the Larger Bench of the High Court .....

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lie for the purpose of condonation of delay in filing the appeal. (3) On the third question, the answer is in affirmative, but with the clarification that- (A) The petition under Article 226 of the Constitution can be preferred for challenging the order passed by the original adjudicating authority in following circumstances that (A.1) The authority has passed the order without jurisdiction and by assuming jurisdiction which there exist none, or (A.2) Has exercised the power in excess of the jur .....

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cience enriched by judicial experience and practical wisdom of the judge." 9. The aforesaid shows that insofar as exercise of power under Section 35 of the Act is concerned, the delay cannot be condoned beyond the outer limit of thirty days nor the appeal can be filed beyond the period of ninety days. Therefore, if one is to examine the exercise of power by the first appellate authority in the present case within the four corners of the statute, it can be said that statutory authority namel .....

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order passed by the original authority, under the aforesaid stipulated circumstances namely, as that of the order passed without jurisdiction or by assuming the jurisdiction which is not possessed or the exercise of power in excess of the jurisdiction or by crossing the limits of the jurisdiction or that there is flagrant disregard to the law or the rules of procedure or violation of principles of natural justice or there is failure of justice or the order has resulted into gross injustice. The .....

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wo basic aspects; one, is that as per the provision prevailing prior to 20/11/2012, the language was "goods as such", whereas, after amendment, the liability with regard to the amount of cenvat credit is considered and reduced to 2.5% for each closure of the year or a part thereof even if the goods are removed after being used. Further, the said aspect has been considered by the Division Bench of this Court in case of CCE v. Solectron Centum Electronics Ltd., [2014 (309) ELT 479 (Kar.) .....

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acturer of the final products shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule 7." 11. The liability to pay duty on capital goods arises after the capital goods have been removed as such. The word "as such" is being the subject matter of interpretation by the various Courts. Punjab and Haryana High Court in the case of Commissioner of Central Excise, Ludhiana .....

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ins India Ltd. v. Commissioner of Central Excise, Pune-III reported in 2007 (219) E.L.T. 911 (Tri-Mumbai) confirmed the order of the Appellate Tribunal which has held as under: "The plain and simple meaning of expression "as such" would be that capital goods are removed without putting them to use. Admittedly, in the present case capital goods have been used for a period of more than 7 to 8 years. As such, interpretation given by the authorities below would lead to absurd results .....

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xcise reported in 2012 (281) E.L.T. 714 (Del.), after referring to the various judgments held as under: "In the present case the appellant purchased the capital goods in the period between 2003 and 2005 and used them in its factory till they were sold to M/s. Harsha International (Khaini) Pvt. Ltd., in June and July, 2007. Thus the capital goods were used for a period of 2 to 4 years. They cannot, therefore, be stated to be sold "as such" capital goods. They were sold as used capi .....

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an amount equal to the CENVAT Credit taken on the said capital goods reduced by 2.5 per cent for each quarter of a year or part thereof from the date of taking the Cenvat Credit." This proviso was added by a Notification No. 39/2007 dated 13.11.2007. Therefore, prior to 13.11.2007, there was no duty payable in respect of capital goods which was used before it is removed. In that view of the matter, second question of law is answered in favour of the assessee and against the Revenue.' 12 .....

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f either side. But in our considered view, if the aforesaid vital defence is not to be considered by the first appellate authority, the resultant effect would be gross miscarriage of justice. Under these circumstances, we find that it would be an appropriate case to exercise power under Article 226 of the Constitution to interfere with the order of the first appellate authority and to direct the first appellate authority to consider the matter in light of the observations made by this Court in t .....

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tained and it was a fit case to exercise power under Article 226 of the Constitution to interfere with the order of the first appellate authority and the interference not being made, has resulted in failure of justice. But at the same time, even if it becomes a case for exercise of the power under Article 226 of the Constitution, the Court may ensure that no litigant or the assessee takes any undue benefit of the power under Article 226 of the Constitution. If the case is considered in favour of .....

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