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Commissioner of Central Excise, Delhi-III Versus M/s Maruti Suzuki India Ltd., Gurgaon

2016 (6) TMI 821 - PUNJAB AND HARYANA HIGH COURT

Cenvat Credit on capital goods used for the purpose of Research and Development of New Model - nexus with manufacturing activity - revenue submitted that the Tribunal has wrongly rejected the appeal of the revenue without considering the arguments raised by the department and relevant provisions of law. It was also urged that the impugned order does not satisfy the test of being a reasoned and speaking order and was, thus, liable to be quashed. - Held that:- The Tribunal being a final fact findi .....

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espondent. ORDER AJAY KUMAR MITTAL, J. 1. This appeal has been preferred by the revenue under Section 35G of the Central Excise Act, 1944 (in short the Act ) against the order dated 15.1.2015 (Annexure A-3) passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (hereinafter referred to as the Tribunal ) claiming the following substantial questions of law:- (i) Whether the respondent can avail CENVAT credit in respect of Capital Goods used exclusively for the purpose of Resea .....

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w Model, localization of CKD parts, localization of inner parts of suppliers, quality and warranty analysis and counter measure and components and vehicle level testing, can be termed as factory under CEA 1944? (iii) Whether a place located in the unit (registered premises) where no goods are manufactured nor any manufacturing process is carried out for the manufacture of goods can be termed as factory in terms of CEA 1944? (iv) Whether the CENVAT credit of ₹ 9,97,38,882.00 availed by the .....

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ble CENVAT credit of ₹ 9,97,38,882/- under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1944? 2. The facts, in short, necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee is engaged in the manufacture and clearance of motor vehicles and parts thereof. During the course of internal audit conducted by the officers of the Audit Branch of Central Excise Commissionerate, Delhi-III from 20th to 23rd, 26th, .....

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nting to ₹ 10,38,87,794/- for the period from November 2007 to October, 2012. The CENVAT Credit so availed appeared to be inadmissible as the machines/equipment/apparatus in question were not used for the manufacture of goods but were solely used for the purpose of research and development. Accordingly, a show cause notice dated 20.3.2013 (Annexure A-1) was issued to the assessee for recovery of ₹ 9,97,38,882/- along with interest and penalty for wrongly availing and utilizing Cenvat .....

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ribunal has wrongly rejected the appeal of the revenue without considering the arguments raised by the department and relevant provisions of law. It was also urged that the impugned order does not satisfy the test of being a reasoned and speaking order and was, thus, liable to be quashed. 5. On the other hand, the impugned order was supported by learned counsel for the respondent. 6. The Hon'ble Apex Court in M/s Kranti Associates Pvt. Ltd. and another v. Sh. Masood Ahmed Khan and others, (2 .....

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1878-97 Vol. 4 Appeal Cases 30 at 40 of the report). 18. This Court always opined that the face of an order passed by a quasi-judicial authority or even an administrative authority affecting the rights of parties, must speak. It must not be like the 'inscrutable face of a Sphinx'. 19 to 50 XX XX XX 51. Summarizing the above discussion, this Court holds: (a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone pr .....

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ant grounds and by disregarding extraneous considerations. (f) Reasons have virtually become as indispensable component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. (g) Reasons facilitate the process of judicial review by superior Courts. (h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is .....

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uirement for both judicial accountability and transparency. (k) If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or 'rubber-stamp reasons' is not to be equated with a valid decision making process. (m) It cannot .....

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ts and was considered part of Strasbourg Jurisprudence. See (1994) 19EHRR 553, at 562 para 29 and Anya vs. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions". (o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for .....

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