By TIOL News Service

MUMBAI, MAR 21, 2014: WHAT's a win if you cannot savor it?

A quick recap since this case was first reported by us in the year 2009 -

++ The applicants are manufacturing various press parts required in automobile industry and engineering industry. They have been availing CENVAT credit. For manufacture of press parts, the applicants procure jumbo coils of Hot Rolled (HR) Steel and subject the same to de-coiling, cutting, and slitting and thereafter carry out pickling and oiling operations.

++ The department was of the view that since the processes do not amount to manufacture as clarified in the Board's Circular 811/08/2005-CX dated 02.03.2005, there is no question of the assessee availing CENVAT credit and paying Excise duty. By various show-cause notices issued for the period from 2.3.2005 onwards till August 2007, it is proposed to deny the credit of CENVAT. For the said reasons, rebate of duty paid on the goods supplied to SEZ unit was also denied.

++ In some of the appeals, the adjudicating authority had sanctioned the refund of CENVAT credit attributable to goods supplied to SEZ unit but the same were appropriated against the denial of credit and the same, on challenge by Department, were accepted by Commissioner (Appeals).

So, against all these orders the appellant had filed appeals before the CESTAT.

And over the years, the matter came to be decided by the Tribunal as under -

++ Department cannot approbate and reprobate - when applicant has taken CENVAT credit and paid duty, which as per Department is not payable, yet having accepted same, Revenue cannot refuse CENVAT on inputs - recovery of nearly two Crores stayed : CESTAT - (2009-TIOL-1250-CESTAT-MUM)

++ Whether process of pickling and oiling of HR sheets/strips amounts to manufacture u/s 2(f) of CEA, 1944 and whether CENVAT Credit can be availed on HR steel sheets/strips - Issue of Recurring nature - Out-of-turn hearing granted: CESTAT - (2010-TIOL-1487-CESTAT-MUM)

++ Appellant undertakes cutting & slitting of coils and subjecting same to pickling and oiling which has been clarified as not manufacture - Once duty on final products has been accepted by department, CENVAT credit cannot be denied even if activity is not manufacture : CESTAT - (2011-TIOL-1333-CESTAT-MUM)

Against this order of the Tribunal, the Revenue filed an appeal before the Bombay High Court only to find it dismissed without any mercy. See 2012-578-HC-MUM-CX

We had sincerely hoped that the matter ended there.

But that was not to be!

Pursuant to the final order passed by the CESTAT on 23.06.2011 allowing their appeal with consequential relief, the assessee had expected that reliefs in the form of ‘rebates' comes his way.

Since nothing of this sort happened, the assessee had requested the Dy. Commissioner to sanction the refund/rebate claims as per the Tribunal's order.

More trouble lay in store for the ‘invincible' assessee.

He sanctioned it on 22/11/2011 but appropriated the same in its entirety against the confirmed government dues pending from the assessee.

Revenue was aggrieved by the sanction of the claim and filed an appeal before the Commissioner(A). Vide his order dated 02/05/2012, the Commissioner(A) allowed the Revenue appeal.

Incidentally this order was not challenged by the assessee but they filed a Miscellaneous Application on 22/08/2013 before the CESTAT praying that directions be given to the Deputy Commissioner for implementing the order passed by the Tribunal.

The Revenue representative submitted that from the final order it was clear that the Tribunal considered only the question of reversibility of CENVAT credit in a case where duty was paid wrongly and held that inasmuch as since the duty has been accepted, that would amount to reversal of credit.

The Member (Technical) while dismissing the Miscellaneous Application as not sustainable in law took the following view -

++ The relief granted by the Tribunal, whether rightly or wrongly, was allowed by the jurisdictional Dy. Commissioner vide order No. R-157/Refund/PVI/CEX/2011-12 dated 22/11/2011 wherein he sanctioned a rebate/refund of Rs.10,97,974/- to the appellant.

++ The said order was challenged by the Revenue before the lower appellate who vide Order-in-Appeal No. P III/RS/150/2012 dated 02/05/2012 held that the appellant was not entitled to the relief.

++ The said order of the appellate authority passed under Section 35A of the Central Excise Act, 1944 has not been appealed against by the appellant M/s. Ajinkya Enterprises within the time limit prescribed and has thus become final.

++ Appeal against the said order should have been filed within a period of 3 months from the date of receipt of the order as provided for under section 35B(3) of the said Act. Even if the appeal is filed belatedly, the same can be admitted by the Tribunal under section 35B(5) if it is satisfied that there was sufficient cause for not presenting it within that period.

++ No such appeal has been filed by the appellant in this case along with any condonation of delay application. Therefore, in the absence of a proper appeal challenging the decision of the Commissioner (Appeals), the present miscellaneous application is not maintainable before this Tribunal. A miscellaneous application is a not substitute for an appeal as provided for in the law.

++ Reliance is placed on the Apex Court decision in State of Punjab and Ors. Vs. Gurudev Singh, Ashok Kumar [1991 AIR 2219, 1991 SCR (3) 663]

The Member (Judicial) differed and while allowing the Miscellaneous application/appeal recorded a separate order thus -

++ The Hon'ble Bombay High Court after taking notice of facts & law was pleased to find no merits in the contention of the Revenue and the order of the Tribunal (dated 23.06.2011)was upheld by its order dated 26.06.2012.

++ Thus, final the order of the Tribunal dated 23.06.2011 have merged with the order dated 26.06.2012 of the Hon'ble High Court.

++ That, the order dated 30.04.2012 (02.05.2012) of the Commissioner of Central Excise (Appeals), being Appeal order No. P III/RS/150/2012 is hit by ‘Doctrine of Merger'. This order dated 30.04.2012 in fact reviews the order of the Tribunal (merged with High Court's order), which power is not vested in the Commissioner of Central Excise (Appeals). Thus, the order of Commissioner of Central Excise (Appeals) is non-est in the eyes of law and ab-initio void.

++ That in view of the peculiar facts and circumstances, and chequered history of this case, in order to do substantial justice to the petitioner, this Miscellaneous application is treated as appeal. Further delay in preferring this Miscellaneous application is condoned.

The matter was, therefore, referred to the 3 rd Member.

The Third Member (Technical) took the following view -

++ The order of the Commissioner (Appeals) was communicated to the applicant. Applicant has chosen not to file any appeal against the said decision of Commissioner (Appeals) till date. In case applicant had any grievance relating to proceedings before Commissioner (Appeals) it would have been appropriate for him to approach the Tribunal at that point of time itself. Having participated in the said proceedings and also receiving the order from Commissioner (Appeals), the only course available to applicant was to file appeal before this Tribunal against the said order of Commissioner (Appeals), which applicant has chosen not to do till date.

++ It is true that the said order [of the Tribunal dt. 23.6.2011] covered seven orders out of which five appeals were pertaining to claims of rebate and two were pertaining to demand of inadmissible CENVAT Credit. During the appeal proceedings appellants have also argued about the rejection of rebate claims. However, from the order it appears that no findings, discussion or analysis has taken place in relation to the rebate claims. The order has finally concluded that the appellants are not required to reverse the credit. Accordingly, the appeals were allowed with consequential relief.

++ From the above, it cannot be said that decision of the Commissioner of Central Excise, Pune was malafide. I agree with the Member (Technical) that miscellaneous application is not a substitute for an appeal as provided in law and in view of Supreme Court decision in the case of State of Punjab and Ors. Vs. Gurdev Singh, Ashok Kumar applicant cannot challenge the decision of Commissioner (A) by filing the miscellaneous application.

++ Member (Judicial) has taken the view that the miscellaneous application has to be treated as an appeal and the delay in filing the miscellaneous application has to be condoned in the facts and circumstances of the case and the application allowed with consequential relief. This Tribunal is creation of statute and is not a High Court/ Supreme Court whose powers are very wide. There is no provision or procedure under the Central Excise Act to consider a miscellaneous application as an appeal and condone the delay suomotu even without knowing the reasons for delay. In the earlier order of the Tribunal, there are no findings in relation to rebate even though in the facts position, certain arguments of the appellant are mentioned. Moreover, clause (b) of first proviso to Section 35B(1) prohibits this Tribunal to entertain appeals relating to rebate claim.

Inasmuch as the Third Member on reference concluded that he agreed with the view expressed by the Member (Technical).

And in view of the Majority decision, the Miscellaneous Application filed by the assessee was held to be not maintainable and resultantly dismissed.

In passing: If the action complained of is no nest from the day one, the same can be challenged even after 100 years - High Court of Uttarakhand in M/s Himgiri Ispat Pvt. Ltd. - (2014-TIOL-320-HC-UKHAND-CX).

(See 2014-TIOL-431-CESTAT-MUM)