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2016 (5) TMI 741 - ALLAHABAD HIGH COURT

2016 (5) TMI 741 - ALLAHABAD HIGH COURT - 2016 (339) E.L.T. A222 (All.) - 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 Ap .....

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explanation whatsoever has been given as to why such a plea was not taken 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 .....

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pires that the sole respondent-M/s Capston Rubber (India) is engaged in the 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 fol .....

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ntioned against serial No.1 of the said Table, the following clearance shall 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 cl .....

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n Scheme, under Notification No.8/2003-Central Excise and No.9/2003-Central 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 t .....

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housand four hundred sixty seven only) and education cess ₹ 22,745.00 (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 depo .....

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e Central Excise Rules read with Notification No.08/2003 dated 1 March 2003; (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 .....

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. After hearing both sides, we find that the dispute relates to the availability 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 p .....

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the value of all clearance of PVC and TPR soles is about ₹ 93 lakhs 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 declara .....

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e Appeal No.245 of 2013. This Appeal was dismissed with liberty to the Central 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 .....

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tion were not filed for the year 2002-03 and 2003-04 and were not available 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 c .....

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. It appears that the department has caused enquiries subsequently, on the 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 fi .....

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other miscellaneous application was filed before the Tribunal elaborating 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 declaration .....

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establish a nexus between interpolations and the participation by the assessee. 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 .....

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enalty; (ii) In the CESTAT appeal filed on 13.11.2006, assessee clearly pleaded (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 .....

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have been filed by the assessee are currently not available in Revenue records, 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 d .....

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h the observation that if filed, it would be decided on merits; (vii) The 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 aggrieve .....

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were never filed by assessee. This assertion is predicated on the fact that 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 .....

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