TMI Blog2018 (7) TMI 2102X X X X Extracts X X X X X X X X Extracts X X X X ..... inal order directing the Revenue to furnish a copy of the said letter with enclosures to the assessee, is not empowered to modify its own order, which in-turn would amount to review, in the absence of any power to do so under the Central Excise Act - HELD THAT:- In the case on hand, admittedly the Tribunal dismissed those applications as withdrawn, however by granting liberty to file Modification Petition. We have already pointed out that the Tribunal has no power to grant such liberty as well. Therefore in the absence of any statutory provision empowering the Tribunal to entertain Modification Petition, the above case laws, which are otherwise distinguishable on facts as well, are not helping the appellant in any manner. Limitation in filing Modification Petition - HELD THAT:- The very application for modification filed before the Tribunal is the one without any sanctity of law, the question of considering the limitation in filing such application does not arise. It is evident that the assessee has already filed their reply to the show cause notice and contested the matter before the Adjudicating Authority. Thereafter, the Adjudicating Authority has also passed the above ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted stock challenge of finished fabrics, stocked in the bonded Excise godowns, Grey Warehouse and Finished Warehouse. Based on a prima facie and reasonable belief that excess quantities were kept for illicit removal without bringing them into RG+ stock, the Revenue seized those excess stocks under mahazars. Thereafter, the seized fabrics were released to the assessee provisionally on execution of General Bond for ₹ 1,01,04,000/- (Rupees one crore one lakh and four thousand only) with security for ₹ 15,00,000/- (Rupees fifteen lakhs only) in the form of Bank Guarantee. When the persons in charge of the Excise Godowns, etc., and those who were present during the time of stock challenge at the relevant places were asked to explain the reasons for the excess of fabrics seized and shortage of fabrics found during the stock taking, as recorded in the mahazars, an explanation was furnished by the assessee on 20-1-2001. Not being satisfied with the explanation tendered by the assessee, two show cause notices were issued on 11-5-2001 and on 2-11-2001 calling upon the assessee to show cause as to why the subject-matter fabrics referred to in the show cause notice No. 30 of 2001 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee of being heard. (iv) The Revenue however filed application under Section 35C(2) of the Central Excise Act, 1944 and prayed for rectification of the mistake in respect of Final Order Nos. 550 and 551, dated 5-5-2009 by contending that non-supply of the letter, dated 20-1-2001 with its enclosures did not violate the principles of natural justice, as the said letter itself had originated from the assessee themselves. It is also contended by the Revenue that even otherwise, as the Department had misplaced that letter at some point of time, they are not in a position to supply the copy of the said letter to the assessee. The said rectification applications were however dismissed as withdrawn on 4-1-2010, with liberty to move applications for modification. Consequently, the Revenue filed Modification Petitions seeking for modification of the order passed in Final Order Nos. 550 and 551 of 2009 only to the extent that the letter, dated 20-1-2001 of the assessee will not be relied upon for the de novo adjudication. The Tribunal by order, dated 8-3-2010 allowed the above miscellaneous applications for modification and directed fresh adjudication without relying upon the lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice. f) (b) The rectification application and the subsequent modification application filed by the Revenue before the Tribunal are not at all maintainable. Section 35C(2) of the Central Excise Act, 1944 does not empower the Tribunal to entertain an application for modification of the order already passed. Under the said provision, only application for rectification of the mistake, that too, apparent from the record, can be filed, whereas, in this case, admittedly, no mistake apparent from the face of the record committed by the Tribunal, was pointed out as the reason for either filing rectification petition or for filing Modification Petition. Therefore, in effect, by way of Modification Petition, the Revenue sought for review of the Final Order passed on 5-5-2009, which power is not available to the Tribunal under the above said Act. Thus, the Tribunal erred in law in entertaining the Modification Petition and allowing the same thereby directing the Adjudicating Authority to conduct a de novo enquiry without reference to the said letter, dated 20-1-2001. g) (c) The first final order passed by the Tribunal, dated 6-9-2006 cannot be overlooked by the Tribunal, es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo months time to reply to the show cause notice, the fact remains that the assessee did not file a reply at all. Consequently, the Adjudicating Authority passed an order in Original on 6-9-2006 based on the available materials. Thus, there is no violation of principles of natural justice. The Rectification Petition originally filed was withdrawn with liberty to file a Modification Petition. Therefore, the Modification Petition is maintainable and the same is also not hit by limitation. The entire issues raised herein with regard to the maintainability of the Modification petition and the limitation in filing the same were not raised before the Tribunal. Hence raising such issue before this Court as the first time cannot permit. Rule 41 of the Customs, Excise and Service tax Appellate (Procedure) Rules, 1982 empowers the Tribunal to pass such orders or give such directions, as may be necessary, to secure the ends of justice. Therefore, the power to modify the order is provided under Rule 41 of the said Rules, even assuming that the same is not available under Section 35C(2) of the Act. 8. In support of the above submissions, he relied on the following case laws : (1) 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would clearly indicate that the Commissioner of Central Excise has dealt with in detail about the stand taken by the assessee in the said letter, dated 20-1-2001 for explaining the shortages and excess of fabrics and however, found that those reasons are not acceptable. Therefore the Commissioner of Central Excise issued the show cause notices and called upon the assessee to show cause as to why duty, penalty and confiscation, etc., should not be imposed. When the show cause notice was issued on 11-5-2001 in one matter and on 2-11-2001 in another matter. We fail to understand as to why the appellant, who furnished the explanation on 20-1-2001 with enclosures, just four months before the issuance of show cause notice, was not in a position to reiterate such contentions once again by way of a reply to the show cause notice, without seeking for a copy of such letter from the Revenue, merely because it was shown as one of the documents relied upon in the show cause notice. Admittedly the assessee claimed that the unit was closed only in the year 2002. Hence it is evident that on the date of receipt of show cause notices, the unit was very much functioning and the assessee would have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatements which were relied upon in the show cause notices and said to have been received by us. We therefore, request you to place once again provide us copies of the following documents, and statements given by our personnel for our perusal and then prepare proper reply to the above show cause notice. Documents and Statements. 1. Chemical Examiner letters issued from File No. LCx.52/S/636/ 200-01, dated 7-3-2001 and 10-4-2001. 2. Statement dated 30-4-2001 given by Sri R. Murali Narayanan, Information Technology Manager. 3. A file containing letter dated 20-1-2001 along with the enclosures-64 sheets. 4. Statement dated 20-4-2001 given by Mr. R. Nallasivan, Sales Executive-5 sheets. We submit that it is not our intention to unnecessarily defer submission of reply to the show cause notice but we are handicapped in tracing out the relevant records, invoices, stock registers, etc., including documents which were relied upon in the show cause notice, due to non-availability of concerned personnel. We therefore humbly request you to please provide us time up to October, 2004 to trace out all the relevant documents, study and prepare proper reply to the show cause no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not in a position to furnish reply to the show cause notice without furnishing a copy of the said letter, dated 20-1-2001. Referring a document in the show cause notice itself need not be construed as though a reliance is also placed by such authority on such document to take an adverse inference against the assessee, unless the show cause notice itself explicitly expresses so. Referring a document in a show cause notice does not mean relying upon the same as well, unless such reliance against the assessee is apparently evident on the face of such notice. 20. Even otherwise, the assessee must show and establish that such non-furnishing of a particular document caused them prejudice and that they are prevented from giving an effective reply to the show cause notice. Certainly, a document which was, either not within the knowledge of the assessee or not emanated from them, if relied on in the show cause notice, that too, by taking adverse inference against the assessee based on such document, then non-furnishing of such document would certainly result in causing prejudice to the assessee. On the other hand, if such document itself has emanated from the assessee and not from any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a refund or otherwise increasing the liability of the other party, shall not be made under this sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard. (2A) The Appellate Tribunal shall, where it is possible to do so, hear and decide every appeal within a period of three years from the date on which such appeal is filed : Provided that where an order of stay is made in any proceedings relating to an appeal filed under sub-section (1) of Section 35B, the Appellate Tribunal shall dispose of the appeal within a period of one hundred and eighty days from the date of such order : Provided further that if such appeal is not disposed of within the period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated. (3) The Appellate Tribunal shall send a copy of every order passed under this Section to the (Commissioner of Central Excise) and the other party to the appeal. (4) Save as provided in the National Tax Tribunal Act, 2005, orders passed by the Appellate Tribunal on appeal shall be final. 22. Perusal of the abovesaid provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice. Therefore, the power conferred under Rule 41 is not to override an order already passed and on the other hand, it is like the power to execute the order already passed, in order to give effect to such order or to prevent abuse of its process, for the purpose of securing ends of justice. Therefore, we are of the view that Rule 41 is not helping the Revenue in any manner on the question of maintainability of the Modification Petition. No doubt, it is true that the Tribunal while dismissing the Modification Petition as withdrawn, has given liberty to the Revenue to file Modification Petition. In our considered view, the Tribunal constituted under the relevant law, cannot empower itself beyond the scope and jurisdiction permissible under the provisions of such law. In other words, the power not specifically vested by legislation, cannot be either presumed or assumed by the Tribunal. 26. In 2004 (163) E.L.T. 403 (S.C.) (The Commissioner of Central Excise, Vadodra v. Steelco Gujarat Limited), the Hon ble Supreme Court has considered the scope of rectification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal dismissed those applications as withdrawn, however by granting liberty to file Modification Petition. We have already pointed out that the Tribunal has no power to grant such liberty as well. Therefore in the absence of any statutory provision empowering the Tribunal to entertain Modification Petition, the above case laws, which are otherwise distinguishable on facts as well, are not helping the appellant in any manner. 29. Next we come to the question of limitation in filing Modification Petition as raised by the appellant. As we find that the very application for modification filed before the Tribunal is the one without any sanctity of law, the question of considering the limitation in filing such application does not arise. 30. Finally, we have to see as to whether the Tribunal is justified in remitting the matter to the adjudicating authority, in view of our findings rendered supra. In our considered view, the Tribunal ought not to have remitted the matter back to the Adjudicating Authority for considering the matter afresh for the following reasons : First of all, we have already found that the said letter dated 20-1-2001 was supplied to the assessee along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, MCL projected before the CESTAT as if a copy of the said letter was not made available to them; whereas, vide their letter dated 22-6-2002, MCL fairly admitted receipt of copies of all the documents relied on in the notice; even if they misplaced their copy as stated before CESTAT, copies of the said letter with enclosures should have been available with MCL; and therefore they may file reply to the notice. The communication also mentioned the dates on which MCL was free to appear for hearing. At the time of hearing held on 16-9-2008, Shri S.S. Thakkur, Vice-President (Excise and Legal) appeared along with Shri M. Ramasubramaniam, Manager (Excise). They filed reply with reconciliation statements. It was orally argued that since there was no evidence for clandestine removal, the proceedings should be dropped. Therefore, it is evident that the assessee has already filed their reply to the show cause notice and contested the matter before the Adjudicating Authority. Thereafter, the Adjudicating Authority has also passed the above orders in Original, dated 21-11-2008 and 27-11-2008. Challenging the same, the assessee filed appeals before the Tribunal which in-turn remanded the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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