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Commissioner of Central Excise Agra Versus M/s Capston Rubber (India)

2016 (5) TMI 741 - ALLAHABAD HIGH COURT

Grant of benefit of Small Scale Industry exemption - Notification No.08/2003-CE dated 1 March 2003 - total value of clearance of excisable goods for home consumption exceeded ₹ 3 crores during the preceding financial years 2002-03 and 2003-04 without payment of central excise duty - Held that:- for a long period of seven years, the appellant did not take up any plea that the declarations dated 14 April 2003 and 12 April 2004 which the assessee claimed to have filed were actually not filed .....

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up at the first instance. Therefore, there is no substantial question of law arises. - Decided against the revenue - Central Excise Appeal Defective No. - 133 of 2015 - Dated:- 19-4-2016 - Hon'ble Dilip Gupta And Hon'ble Ravindra Nath Kakkar, JJ. For the Appellant : Ashok Singh, Sr. S. C. For the Respondent :- Rahul Agarwal ORDER This Appeal has been filed under Section 35-G of the Central Excise Act, 1944 against the order dated 20 October 2014 passed by the Customs Excise and Service .....

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e manufacture and clearance of footwear parts i.e. PVC Soles and Rubber-sheets. PVC Soles are dutiable goods @ 16% while Rubber-sheets have nil rate of duty. The dispute relates to grant of benefit of Small Scale Industry exemption notification dated 1 March 2003. The relevant portion of the said exemption notification is as follows: " Para 2: The exemption contained in this notification shall apply subject to the following conditions, namely (i) ............. (ii) ............... (vii) the .....

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ll not be taken into account, namely :- (a) clearance, which are exempt from the whole of the excise duty leviable thereon (other than an exemption based on quantity or value or clearance under any other notification or on which no excise duty is payable for any other reason); (b) ......................... (c) ........................ (d) ........................ 3A. For the purpose of determining the aggregate value of clearance of all excisable goods for home consumption, mentioned in clause ( .....

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l Excise, both dated 01.03.2003, for the financia year 2003-04 the value of clearance for calculating the limit of ₹ 3 Crores for the preceding financial year 2002-03 includes the value of exempted goods (excluding exports) also. And exempted goods has been defined as: "exempted goods means excisable which are exempt from the whole of the duty of excise leviable thereon, and includes goods which are chargeable to 'Nil' rate of duty". The benefit of this notification was d .....

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0 (Rupees Twenty two thousand seven hundred forty five only) totalling to ₹ 29,25,212.00 (Rupees Twenty nine lakh twenty five thousand two hundred twelve only) which has not been paid by them on the removal of footwear parts should not be demanded under provision to Section 11A[1] of the Central Excise Act, 1944 and confirmed against them under Section 11A[2] of the Central Excise Act, 1944. Since the party have deposited ₹ 8 Lakh towards Central Excise duty detected by the Prev. Off .....

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3; (c) Interest should not be demanded from them under section 11-AB of the Central Excise Act, 1944. The Assistant Commissioner, Central Excise by order dated 26 October 2005 ordered for confiscation of the seized goods since the rubber-sheets manufactured by the respondent were excisable goods though subject to nil rate of duty. It was held that for clearance value of all excisable goods, the value of clearance of rubber-sheets had to be taken into account in terms of the notification dated 1 .....

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bility of small scale exemption notification No. 8/2003 dated 1.3.2003. The demand stands confirmed by denying the benefit of said notification for the financial years 2003-2004 and 2004-2005 and extended period stands invoked inasmuch as the show cause notice was issued on 5.4.2006. The denial of benefit of notification is on the ground that the value of 'aggregate clearance' of goods for home consumption in the preceding financial year was more than ₹ 3 crore and as such the bene .....

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and of commissioned rubber sheets is also ₹ 3.9 crores. A reading of said declaration makes it very clear that appellants have declared the value of dutiable as also exempted final product, total of which exceed ₹ 3 crores thus making the assessee not entitled to the benefit of exempted notification in the subsequent financial year. Inspite of appellants having disclosed the full information in the said declaration, the Revenue has raised the Show cause notice only on 5.4.2006, i.e. .....

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tral Excise Department to file a review petition before the Tribunal to be decided on merits and the order of the High Court is reproduced below: "We have heard Shri Ashok Singh, learned counsel for the central excise department. This central excise appeal under Section 35G of the Central Excise Act, 1944 has been filed by the Commissioner of Central Excise, Kanpur on the following question of law:- "Whether the order passed by Customs, Central Excise & Service Tax Tribunal, New De .....

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e on the records of the department. The stand taken in the proceedings that declarations were submitted are based upon the photocopies of which the entries in the receipt register showing receipt of the declarations were found time barred and fraudulently inserted. The department got examined these entries in the receipt register of the year 2003-04 through M/s GP Saxena & Sons Forensic Consultants, Lucknow, who have confirmed in their preliminary opinion report dated 29.8.2013 that the disp .....

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receipt of the declaration and has discovered that the entries in the receipt register were tampered and fraudulently inserted. This Court under Section 35G cannot entertain an appeal on question, which was not raised and has no factual foundation. The appeal is dismissed with liberty to the Central Excise Department to file review petition before the Tribunal to be decided on its merits." The appellant thereafter filed an application before the Tribunal seeking recall of the order dated 1 .....

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the assertions and pleadings set out in the earlier application. These two applications were dismissed both on the ground of limitation set out under Section 35-C(2) of the Act and on the ground that the Revenue failed to establish fraud as a factor vitiating the earlier order dated 15 February 2013. It was sought to be asserted in the miscellaneous application that after the final order, copies of the original declarations filed with the department and details of receipt registers for the year .....

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essee. As regards the miscellaneous application filed for recall of the order, the Tribunal recorded the sequence of events in paragraph 10 which are as follows: "10. What then are the sequence of relevant events, the grounds pleaded and the facts established by Revenue to seek rectification of the final order dated 15.2.2013? A summary : (i) Assessee pleaded before Commissioner, Central Excise, Lucknow (Adjudicating Authority) that for the financial years 2003-04 and 2004-05 they had decla .....

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eaded (in para 4 of the statement of facts) that declarations were filed on 14.4.2003 and 12.4.2004 (for 2003-04 & 2004-05, disclosing the clearance. The assessee also specifically challenged the adjudication order on the bar of limitation; (iii) Despite an interval of nearly 7 years from the date of institution of the appeal (in November 2006) to disposal of the appeal in February 2013, Revenue, despite having noticed the facts recorded in the adjudication order, the specific pleadings in t .....

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ords, a plea never raised for 7 years. The assessee has not only pleaded but has also placed before us for perusal copies of the 2 declarations containing initialled and stamped receipt endorsements. Neither during the process of adjudication nor for over seven years during pendency of the appeal in this Tribunal, Revenue had taken any steps to either rebut the claim of the assessee or verify whether office copies of the declarations are available; (v) It is only on 26.8.2013, more than six mont .....

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rectification/review application (No.61193 of 2013) was filed on 13.11.2013, beyond six months from the date of the final order (dated 15.2.2013) and an improved version of the application was filed on 21.7.2014; and (viii) Section 35C(2) of the Central Excise Act, 1944 authorises the Tribunal to rectify any mistake or amend any order (final order) passed under sub-section (1), if it is brought to our notice by an aggrieved party that the order suffers from a mistake apparent from the record.&qu .....

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t originals of these declarations are not currently available in Revenue records. Inference that the assessee did not file these declarations is based on the singular fact that there are overwritings/interpolations in the receipt register of 2003-04, as opined by the Forensic Consultant. On the basis of this opinion, Revenue seamlessly proceeds to conclude that the interpolations were the product of a collaborative effort of some unknown officers of the Department, at the behest of or in conniva .....

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