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M/s Garg Industries, M/s Deepak Hinges Pvt. Ltd., Shri B.M. Garg, M/s Jai Hardware Pvt. Ltd., M/s D.D. Hardware Pvt. Ltd., M/s Doordevice Manufacturing, M/s D.P. Garg Exports Pvt. Ltd., Shri Krishna Kumar, M/s Monica Steels Pvt. Ltd. Versus Commissioner of Central Excise, Noida

2017 (12) TMI 1280 - CESTAT ALLAHABAD

Jurisdiction - entire case of the appellant M/s Garg Industries is that the SCN dated 20 February, 2008 was adjudicated earlier vide Order-in-Original dated 30 March, 2009. The said Order-in-Original having been withdrawn by the Department, in the appeal/proceedings before Hon’ble Supreme Court wherein the said appellant was not even party, the permission obtained for fresh adjudication will not apply in its case - whether the impugned order have been passed validly under jurisdiction and powers .....

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ier adjudication order without reserving liberty to proceed from the stage of the SCN dated 20 February, 2008 against Garg Industries, we find no lawful authority for passing fresh Order-in-Original, being the impugned order. We hold that the Commissioner is not correct in passing a fresh Order-in-Original dated 31 March, 2013, in respect of the same subject matter for the same period, since the earlier Order-in-Original dated 30 March, 2009 was withdrawn in the separate proceedings, in which so .....

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There is no provision under the Central Excise Act, 1944, which grants power to the Adjudicating Authority to re-adjudicate the SCN on same facts for same period relating to same clearances once again, the said SCN already having been adjudicated upon by passing of Order-in-Original dated 30 March, 2009. - The impugned Order-in-Original is not sustainable - appeal allowed - decided in favor of appellant. - E/58519-58526 & 58536/2013-EX [ DB ] - A/71748-71756/2017-EX[DB] - Dated:- 29-11-201 .....

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e Act. 2. Brief facts of the case are that there was a search in the premises of the appellant's on 22 February, 2007. It appeared to Revenue that the appellant firms which were owned by or closely held by the Garg family headed by one Shri B.M. Garg, were engaged in the manufacture of Hinges and other hardware articles. Shri B.M. Garg was the proprietor of Garg Industries and was also partners/director in some of the aforementioned appellants companies which had been allegedly created artif .....

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n fact the said units are nothing but an extension of M/s Garg Industries, the proprietorship concern of Shri B.M. Garg. Accordingly, show cause notice dated 20.02.2008 (addressed to Garg Industries, B.M. Garg & Krishan Kumar) was issued proposing recovery of duty of ₹ 1,70,51,187/- as duty not paid/short paid on the excisable goods manufactured and cleared by them (all together) during the period February, 2003 to December, 2007 by wrongly availing of SSI exemption with further propos .....

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ries with further proposal that the quantity of excisable goods seized at various premises of Garg Group of Industries, valued together at ₹ 95,57,046/- be not confiscated with further proposal to impose penalty and also proposal for confiscation of seized truck valued at ₹ 3 lakhs which had been utilized for alleged clandestine removal. 3. The SCN was adjudicated on contest by the Commissioner, Central Excise, Noida vide Order-in-Original No.16/Commissioner/Noida/2009 dated 30 March .....

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d and D.P. Garg Export Pvt. Ltd. challenged the seizure of their goods made by the aforesaid Order-in-Original on the grounds of non-issue of show cause notice to them by filing writ petitions before Hon ble Allahabad High Court against confiscation of their goods without making them necessary party in the aforementioned show cause notice. The Hon'ble High Court dismissed the writ petitions, observing that "We find no infirmity in the impugned order. The petition is devoid of substance. .....

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of the same is reproduced hereunder: that a copy of the said Show Cause Notice dated 21.02.2008 together with an addendum if any, shall be served within a period of four weeks hereof on the petitioner and such other persons from whom the seizure were effected; that they can be granted an opportunity to reply to the Show Cause Notice/Addendum and produce whatever material they would choose in answer to the Notice in their defence and that after grant of an opportunity of personal hearing, fresh .....

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Accordingly, the Hon'ble Supreme Court passed the following order dated 19 August, 2011: Counsel appearing for the respondents (department) on instructions which are placed on record, states that the department had taken a decision to withdraw the Order-in-Original dated 30.03.2009. Since the Order-in-Original dated 30.03.2009 is being withdrawn, practically nothing survives in these matters. We grant permission to the respondent/department to withdraw the said order. It is, however, made c .....

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self was withdrawn by the Adjudicating Authority vide Final Order of the Tribunal dated 15 September, 2011. 9. Thereafter, separate addendums were issued dated 16 September, 2011, on the other appellants herein namely, Monica Steel Private Ltd, D.D. Hardware Private Ltd, Deepak Hinges Private Ltd, Doordevices manufacturing company, Jai Hardware Private Ltd and D.P. Garg Export Pvt. Ltd. requiring them to show cause as to why - The clearances made from their respective promises during the period .....

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roposal to impose penalty under Rule 25 of CER, 2002. Thereafter, giving opportunity of hearing to the appellants, the present impugned Order-in-Original was passed, demanding Central Excise Duty of ₹ 1,70,51,187/- from M/s Garg Industries, Noida, alongwith interest for the period February, 2003 to December, 2007 holding that they have wrongly availed SSI exemption, the clubbing the turnover of all these appellants with further appropriation of ₹ 40 lakhs paid during investigation. F .....

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05 valued at ₹ 11,91,700/-. Further, ordering vacation of the seized quantity of excisable goods valued at ₹ 11,91,700/-, further ordering confiscation of goods valued at ₹ 83,65,346/- in terms of Rule 25 of CER, 2002, seized from the different premises of the appellants herein and considered aggregating the same in the hands of Garg Industries as proposed in the addendum dated 16 September, 2011. Further option to redeem was given to the Garg Industries, Monica Steel Private L .....

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umar valued at ₹ 3 lakhs was also confiscated with option to redeem on payment of redemption fine ₹ 5000/- and as the truck was provisionally released on deposit of security ₹ 5000/- and bond, the amount of security was appropriated. Further, penalty was ₹ 50,000/- was imposed on Shri Krishna Kumar, the transporter under Rule 26 of CER, 2002. 10. Assailing the impugned Order-in-Original, Shri Rupesh Kumar, advocate appearing for all the appellants have made the following .....

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be obtained against them which further gets clarified from the order of the Hon ble Supreme wherein it was specifically stated that further action, if any, could be proceeded with in accordance with law . His submission is that the phrase in accordance with law would only mean in accordance with the statutory provisions or in accordance with the law as interpreted in the binding judicial precedents. In support of his submission, Learned Counsel has relied upon the decision of the Hon ble Supreme .....

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ding to the Learned Counsel, the Department has abandoned its right to proceed against the said three appellants. In support of the said plea, the Learned Counsel has relied upon the decision of the Hon ble Supreme Court in the case of Sarguja Transport Service Vs State Transport Appellate Tribunal, M. P., Gwalior & Ors (1987) 1 SCC 5. (iv) Reliance was also placed on the decision of this Tribunal in the case of Collector of Central Excise, Belgaum Versus Modern Mills Ltd., Hubli - 1986 (23) .....

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hree appellants, the said SCN issued to the said three appellants merged with the Order-in-Original passed against them and, thereafter, no SCN was available for fresh adjudication. In support of this plea, the Learned Counsel relied upon the decision of the Hon ble Andhra Pradesh High Court in the case of Vuppalamritha Magnetic Components Ltd. Vs DRI (Zonal Unit), Chennai - 2017 (345) ELT 161 (AP). (vi) The Learned Counsel also referred to the Stay Order dated 20.02.14 passed by the Tribunal in .....

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t to the directions of the Tribunal during the course of subsequent hearing. However, in none of the two affidavits, the department could either state the source of power for such withdrawal nor dispute or deny the fact that Garg Industries and the two individuals were not parties to the proceedings before the Hon ble Supreme Court. (vii) Clubbing of clearances in not permissible in the facts of the present case in as much as Garg Industries has not availed any SSI benefit on the excisable goods .....

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nfiscation so as to redeem by paying redemption fine. Accordingly, the learned Counsel prays for allowing the appeals and setting aside the impugned order. 11. The learned Joint Commissioner A.R. Shri. Rajeev Ranjan defending the impugned order states that fresh adjudication of SCN have taken place as per permission granted by Hon ble Supreme Court, and in support, he relied upon the contents of the two affidavits filed by the officers of the Department in compliance with the directions of this .....

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ot even party, the permission obtained for fresh adjudication will not apply in its case. It amounts to abandoning the right of the Department, so far as the appellant M/s Garg Industries are concerned. We are prima facie of the view that withdrawal of the earlier adjudication order dated 30 March, 2009, without reserving liberty to proceed from the stage subsequent to the stage of the show cause notice dated 20 February, 2008 against M/s Garg Industries and of other concerned parties, we find n .....

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013, in respect of the same subject matter for the same period, since the earlier Order-in-Original dated 30 March, 2009 was withdrawn in the separate proceedings, in which some of the present appellants were not even party. Therefore, there was no question of seeking permission from the Hon'ble Supreme Court in the case of appellant-M/s Garg Industries to pass a fresh adjudication order. During the course of arguments, specific question was put to the learned AR as to whether any permission .....

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een made basis for passing a fresh adjudication order against Garg Industries & others, does not grant unconditional permission to withdraw the earlier adjudication order. The said order categorically states that further action could be proceeded with "in accordance with law", which would mean as per the provisions of law, as held by the Apex Court in the case of Collector of Central Excise vs. Modella Steels and Alloy reported at 1997 (96) ELT 20 (SC) to mean as interpreted in the .....

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t is also not clear from the record as to which authority withdrew the Order-in-Original dated 30 March, 2009 and in exercise of which powers. We further find that the appellant's counsel have rightly placed reliance on the ruling of Supreme Court in the case of Sarguja Transport Service vs. State Transport Appellate Tribunal, M.P., Gwalior and others reported at (1987) 1 SCC 5, wherein it has been held as under: ..... The principle underlying Rule 1 of Order XXIII of the Code of civil proce .....

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he case of abandonment or withdrawal of a suit without the permission of the Court to file a fresh suit, there is no prior adjudication of a suit or an issue is involved, yet the Code provides, as stated earlier, that a second suit will not lie in sub-rule (4) of Rule 1 of Order XXIII of the Code when the first suit is withdrawn without the permission referred to in sub-rule (3) in order to prevent the abuse of the process of the Court. 13. Applying the ratio of the Apex Court in the case of Sar .....

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e clearances once again, the said SCN already having been adjudicated upon by passing of Order-in-Original dated 30 March, 2009. In our opinion, the re-adjudication proceedings of the same SCN dated 20 February, 2008 along with addendums and passing of the present Order-in-Original impugned hearin is not saved by order dated 19 August, 2011 of the Hon'ble Supreme Court, so far the Garg Industries and the two individuals, namely, Shri B.M. Garg and Shri Krishna Kumar are concerned. 14. We, fu .....

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