TMI Blog2019 (4) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... d not been amended, rescinded, repealed or superseded. In fact, the above provision is an amalgamation of Section 6 6A of the General Clauses Act, 1897 which applies to Acts, while Section 38A of the Act is specifically in relation to Rules under the Act - the view of the CESTAT cannot be upheld. Whether on the facts and in the circumstances of the case the observation of the CESTAT that the principles of natural justice were violated on the grounds mentioned in para 5(e) (CESTAT order page 13) when it is on records that the Respondents herein themselves were responsible for not availing the opportunity offered from time to time of inspection of all documents? - Held that:- his submission cannot be accepted as the entire basis of the Revenue's case against the Respondents is circumstantial to conclude that superior grade steel was diverted elsewhere after taking MODVAT Credit thereon and substituted with a lower grade steel to manufacture said goods. The correctness of these statements made by the person can only be tested, if the same is processed through cross examination of the party affected by it. In the absence of cross examination, the order suffers from breach of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucturals Engg. Ltd. as reported in A/771 to 722/WZB/04-CII when the said decision is also under challenge and Appeal against it is pending in Nagpur Bench of Bombay High Court? (c) Whether the CESTAT was right in law in setting aside recovery of irregular modvat credit amounting to ₹ 1,67,39,432/under Rule 571 having been fraudulently availed in respect of inputs during the period 31.03.1995 to 06.09.1999 and setting aside equal penalty of ₹ 1,67,39,432/imposed under Rule 571(4) read with Rule 173Q, and recovery of interest at the appropriate rate on the amount of modvat credit determined to be disallowable and recoverable with effect from 23.07.1996 under Rule 571(5)? (d) Whether in the facts and circumstances of the case the CESTAT was correct in law in rejecting all the evidences collected or/and statements recorded in an enquiry conducted under Section 14 of the Central Excise Act, 1944 which is deemed to be 'Judicial Proceedings' under sub Section (3) of Section 14 ibid, within the meaning of Section 193 and Section 228 of the Indian Penal Code, 1860? (e) Whether the CESTAT was justified in allowing the Appeals of the Respondents ignoring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector (Respondent No.3) and the Chief Officer (Respondent No.2). (iv) The Respondents contested the show cause notice and sought cross examination of the various persons on whose statement department was placing reliance as well as inspection of various documents relied upon by the Revenue. The Respondents in particular submitted that the show cause notice is not sustainable in view of the MODVAT Rules being Rules 57A to 57U of the said Rules being substituted with CENVAT Rules being 57AA to 57AK of the said Rules with effect from 1st April, 2000. There being no saving clause and General Clauses Act being inapplicable to Rules, thus, the show cause notice aborts. (v) However, the Commissioner of Central Excise by his order dated 10th May, 2004 did not accept the Respondent's submission in view of insertion of Section 38A of the Act in 2001 w.e.f. 1944. Further, he held the persons whose cross examination was sought need not be granted as they had made the statements under Section 14 of the Act. Besides, the documents as sought for were not required to be furnished. Therefore, he confirmed the show cause notice and imposed penalties upon the Respondent No.1 its Chie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00. (ii) On appeal, the CESTAT allowed Respondents' appeal on this issue by holding that the notice issued under the erstwhile MODVAT Rules will not be saved, as 'substitution' will not be covered by the words 'amended, repealed, superseded or rescinded' as provided under Section 38A of the Act. For this purpose, it placed reliance upon its earlier decision in the case of Sunrise Structural Engineering Pvt. Ltd., v/s. Commissioner of Central Excise [2004] 177 ECR 307. (iii) We have perused the decision of the Coordinate Bench of the CESTAT in the case of Sunrise Structural and Engineer Ltd. (supra). We find that the aforesaid decision of the CESTAT is based upon the Apex Court's decision in the case of Kolhapur Cansugar Mills Pvt. Ltd., (supra) and M/s. Rayala Corporation (P) Ltd., (supra) wherein after holding that the provisions of Section 6 of the General Clauses Act, will not apply to Rules, went on to hold that section 6 of the General Clause Act, 1897 would only apply to repeal and not to omission of any Central Act or Regulation. This to conclude that Section 38A of the Act though introduced with retrospective effect, will not save t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. 6. Re. Question (b): (i) We note that the impugned order of the CESTAT has reached a finding of fact that the order dated 10th May, 2004 of the Commissioner of Central Excise has been passed in breach of principle of natural justice. This in view of the fact that cross examination of persons whose statements were relied upon by the Revenue were not given to the Respondent. Further, non-supply of documents relied upon by the Revenue would vitiate the order passed by the Commissioner of Central Excise. Thus, the CESTAT holds that the above facts would warrant a remand for re-adjudication. However, same was not done by CESTAT as it would be academic-in view of the fact that the proceedings commenced by show cause notice dated 17th January, 2000 could not be continued, post the omission of Rule 57I of the said Rules w.e.f. 31st March, 2000. (ii) Ms. Cardozo, learned Counsel in support of the Appeal submits that the statement being relied upon were given under Section 14 of the Act. Therefore, such statements would not be required to go through the rigours of cross examination, before being accepted. (iii) This submission cannot be accepted as the entir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice has now been restored to the Commissioner of Central Excise for fresh disposal after following the principles of natural justice. Needless to state that at the time of adjudication, the Commissioner of Central Excise would consider the Respondents' contention that the aforesaid two decisions in M/s. Bansal Steel Corporation (supra) and M/s. Ramesh Kumar Rajendra Kumar Co., (supra) apply to the present fact and if so, grant the necessary benefit. (iv) Thus, effectively this issue is also remanded for reconsideration. It is made clear that our restoring this issue to the Commissioner of Central Excise for fresh adjudication should not be construed as our accepting the Revenue's case. This remand has only arisen on account of our answer to question (b) above. 9. Therefore, the substantial questions of law are answered as under: (A) Question (a)in the affirmative i.e. in favour of the Revenue and against the Respondent; (B) Question (b)in the affirmative i.e. in favour of the Respondent and against the Revenue; (C) Questions (c)(d) and (e) are not answered in view of being academic; and (D) Question (f) is not specifically answer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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