TMI Blog2002 (3) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... le in sub-heading 6401.11 of the Central Excise Tariff (in short, 'the Tariff'). It is thus liable for central excise duty, whereas by reason of various notifications issued in this regard from time to time and in particular Notification No. 49 of 1986, dated 28-1-1986 'footwear manufactured without the aid of the power' are exempt from payment of such duty. 5. The petitioner would contend that it started manufacturing footwear with the aid of the power in unit No. 1 wherefor due intimation was given to the Central Excise Officer. The said unit was also licensed/registered under the Central Excise Rules (in short, 'the Rules'). Unit No. 2, however, was not required to be licensed/registered under the said Rules. 6.However, the petitioner would contend that a declaration used to be made every year, to which requirement the petitioner had been complying with. 7.On or about 3-9-1993, the Officers of Central Excise Division, Agra inspected the factory premises, i.e., both the units of the petitioner. No machine was allegedly found in unit No. 2, i.e., where the manufacture of shoes used to be made without the aid of power. On enquiry, allegedly the partners of the petitioner fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admission by the petitioner that goods (iii) were sent to 'Neelco' i.e., unit No. 1. That the date of dispatch in the Outward Register did not (iv) tally with the dates mentioned in the Challans, had not been controverted. This strengthens the inference that footwear manufactured in unit No. 2 had been sent to unit No. 1 for completion of the manufacturing process with the aid of power. The petitioner had not distinguished between the movement of (v) stores and raw materials from the head office to unit No. 1 from dispatch of footwear manufactured without power in unit No. 2, which was a strong circumstantial evidence suggesting that in fact manufacturing activity requiring use of power was completed with the aid of power. The onus was on the petitioner to show that the movement of (vi) goods from head office to unit No. 1 did not include footwear manufactured in unit No. 2." 13.An application was filed by the petitioner thereafter before the learned Appellate Tribunal for rectification, which was also dismissed. 14.Dr. A.M. Singhvi, the learned Senior Counsel appearing on behalf of the petitioner inter alia would submit that the learned Appellate Tribunal misread and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of law to this Court in terms of Section 35C of the Act and in that view of the matter this Court should not exercise its discretionary jurisdiction under Article 226 of the Constitution, particularly when such a reference would also be barred by limitation. 24. Dr. Singhvi, in reply submitted that existence of alternative remedy could not be a bar in this Court's exercising its jurisdiction under Article 226 of the Constitution as a jurisdictional issue has been raised. Reliance in this connection has been placed on Dr. Smt. Kuntesh Gupta v. Management of Hindu Kanya Mahavidyalaya, Sitapur (U.P.) Ors. reported in AIR 1987 SC 2186 and Whirlpool Corporation v. Registrar of Trade Marks, Mumbai Ors. reported in (1998) 8 SCC 1. 25.Section 11A of the Act reads thus :- "11A.Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - When any duty of (1) excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neously refunded, the date of such refund."in the case of excisable goods on which duty of excise has (c) been erroneously refunded, the date of such refund." 26. A bare perusal of the said Section 11A(1) of the Act would show that the Central Excise Officer may within a period of 6 months from the relevant date may demand excise duty, which has not been levied or paid or has been short-levied or short-paid or erroneously refunded. Proviso appended thereto, however, applies in the event such non-levy or short-levy of excise duty or short-paid or erroneously refund of excise duty has occasioned by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of the Act or of the Rules made thereunder. Commission of fraud, collusion or misstatement or suppression of facts, etc., by the manufacturers is the sine qua non for invoking the proviso appended to Section 11A of the Act. 27.The power of the Central Excise Officer to levy additional excise duty or impose penalty in terms of Section 11A and the proviso appended thereto are therefore different and distinct. They are required to be exercised in different fact situati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of the Tribunal does not lack inherent jurisdiction. [See Animine Ltd. v. Foreign Compensation Commission, 1969 (2) A.C. 147]. 37.The learned Appellate Tribunal inter alia based its decision on a purported finding of the Commissioner to the effect that the goods manufactured and cleared without payment of duty from unit No. 2 without the aid of power, which was not correct, as from a perusal of the order passed by the Commissioner as contained in Annexure 'P-9', it does not appear that such a finding had been arrived at by the Commissioner. 38.Yet again, the learned Appellate Tribunal held that from the order of the Commissioner, it would appear that the date of dispatch indicated in the Outward Register did not tally with the date mentioned in the challan is not controverted by the petitioners. But such a finding does not appear to have been arrived at by the Commissioner. 39. The learned Appellate Tribunal has arrived at a finding of fact that the petitioner had disclosed that they have been claiming the benefit of Notification No. 49 of 1986. 40.In a situation of this nature, particularly when a huge amount of duty is imposed and penalty is levied, in our opinion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er law. The usual mode recognized by law for proving fact is by production of evidence and evidence includes oral evidence of witnesses. The opportunity to prove the correctness or completeness of the return would, therefore, necessarily carry with it the right to examine witnesses and that would include equally the right to cross-examine witnesses examined by the Sales Tax Officer. Here, in the present case the return filed by the assessee appeared to the Sales Tax Officer to be incorrect or incomplete because certain sales appearing in the books of Hazi Usmankutty and other wholesale dealers were not shown in the books of account of the assessee." 48. In K. Raghuram Babu v. Director General of Railway Protection Force, New Delhi Ors. reported in 2001 (5) ALT 543, it was held thus :- "11. Right of cross-examination, as is well known, is a valuable right. No evidence shall be admissible unless the witness is permitted to be cross-examined. Such a right can neither be taken away directly or indirectly." 49.The decision of the Tribunal is partly based without taking into consideration the relevant factors. It also took into consideration factors, which were irrelevant and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has held :- "But Hirday Narain moved a petition in the High Court of Allahabad and the High Court entertained that petition. If the High Court had not entertained his petition, Hirday Narain could have moved the Commissioner in revision, because at the date which the petition was moved the period prescribed by s. 33A of the Act had not expired. We are unable to hold that because a revision application could have been moved for an order correcting the order of the Income-Tax Officer under s. 35, but was not moved, the High Court would be justified in dismissing as not maintainable the petition, which was entertained and was heard on the merits." 29. Reference in this connection may also be made to Dr. Bal Krishna Agarwal v. State of U.P. Ors., reported in 1995 Lab. 1C 1396 wherein it has been held :- "Having regard to the aforesaid facts and circumstances we are of the view that the High Court was not right in dismissing the Writ Petition of the appellant on the ground of availability of an alternative remedy under s. 68 of the Act especially when the writ petition that was filed in 1988 had already been admitted and was pending in the High Court for the past more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack to the learned Appellate Tribunal for consideration of the matter afresh. 59. Before we apart, however, we intend to make it clear that we have not independently arrived at any decision and any observation made herein may not be construed to be final determination of any question. The learned Appellate Tribunal, therefore, would be entitled to arrive at its own decision on the basis of the materials on record and on the basis of such other or further materials, which may be produced before it by the parties. 60. Having regard to the facts and circumstances of the case, we are also of the opinion that the petitioner herein should produce before the learned Appellate Tribunal the agreement entered into by and between itself and M/s. Bata India Limited so as to enable the learned Appellate Tribunal to come to a conclusion as to whether the petitioner could make any unlawful gain by evading payment of excise duty, although M/s. Bata India Limited thereby was not benefited. 61. In view of the aforementioned findings, this petition is disposed of accordingly. However, in the facts and circumstances of the case, there shall be no orders as to cost. - - TaxTMI - TMITax - Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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