By TIOL News Service

MUMBAI, JAN 30, 2015: THE dispute involved in this case is whether the process undertaken by the Appellant would amount to manufacture. The Commissioner in adjudication, dropped the proceedings, but the Committee of Chief Commissioners reviewed the order and filed an appeal before the Tribunal. The Tribunal allowed the appeal, but remanded the matter to quantify the duty demand within normal period and also to examine the admissibility of CENVAT Credit.

The appellant filed an appeal against the said order of the Tribunal and Writ Petition against dismissal of ROM application. The main contention of the appellant is that the Tribunal has already held in similar case the process did not amount to manufacture. It is contended that similar proceedings were initiated against M/s. E. Merk (i) Ltd. There is an order passed in the case of M/s. E. Merk (i) Ltd., namely, final order No.995/98C dated 12th October, 1998. What is done by the appellants is identical inasmuch as what M/s. E. Merk did earlier has now been assigned as job work to the appellants. M/s. Merck Specialties Pvt. Ltd. are same as M/s. E. Merk (i) Ltd., M/s. E. Merk (i) Ltd. had undertaken similar process and identical activity at its Taloja Unit. The show cause notices were issued to M/s. E. Merk and alleging that the activity of purification carried out by said M/s. E. Merk amounts to manufacture. On that, an order was passed on 8th August, 1992. This order was upheld by the Commissioner of Central Excise (Appeals) by his order dated 26th September, 1994. The Tribunal also did not deem it fit to interfere with these orders and confirmed them by final order dated 12th October, 1998. The Tribunal's final order was accepted by the Department / Revenue. The finding in the final order dated 12th October, 1998 binds the Revenue.

After hearing both sides, the High Court took a serious note of the manner in which the appeal was disposed of by the Tribunal and held:

The appellants claim to be carrying on job work for E. Merck Specialties (P) Ltd. The principals of the appellants (E.Merk) faced identical allegations and were proceeded against for having carried on manufacturing activity in their premises. The product or goods in relation to which the allegations are made are identical. The Tribunal upheld the arguments of E. Merck and allowed its Appeal. That order was relied upon by the appellants in the proceedings against them. They succeeded before the Commissioner. The Tribunal does not make any reference to all this and does not deem it necessary to consider the arguments based on its earlier orders. These orders were stated to be final. Yet, the Tribunal omits to consider them. We are not impressed by the argument of Mr. Bhate (Revenue) that though the assessee cited before the Tribunal the decision in its own case or rather in the case of M/s. Merk Specialities Pvt. Ltd. or M/s. E. Merk (i) Ltd., the judgment of this Court in the case of Mercedez Benz was not brought to the notice of the Tribunal. It is surprising that the Tribunal has to be shown on this elementary or basic point any judgment as it is its bounden duty in law to have adverted to an order passed by it or its coordinate bench on the same point, may be in earlier round of litigation. If it is relevant to the adjudication in the present appeal, then, it is the further bounden duty to deal with it in details. If the judgment is distinguishable on facts a definite conclusion on that count has to be reached. If the judgment is not correct then equally reasons have to be assigned for such a crucial conclusion. This is the rule which has been emphasized. Rule of judicial discipline requires reference being made to a larger bench in case of differences of opinions or views between the benches of the Tribunal on identical facts. A healthy way of deciding matters and to maintain purity and sanctity of the judicial process is emphasized by this Court in Mercedes Benz (supra) and relying upon the judgment of the Hon'ble Supreme Court of India. This binds the Tribunal. We have also cautioned the Tribunal in number of cases that the process of adjudication and in Revenue matters requires an early finality to vexed issues. If the issues are raised repeatedly then all more there ought to be certainty and end to the litigation. In Revenue matters none is benefited by delays. If the delays are caused by repeated remand of proceedings then that has to be avoided. If its earlier orders have been brought to the notice of the Tribunal, then, the least that is expected is that they are dealt with and considered seriously and a conclusion is reached about their applicability to the facts and circumstances of a given case. The Tribunal which is manned by experienced members drawn from the Revenue or Technical Services and Judiciary are expected to perform this task efficiently. They are selected and appointed on account of their merit and not just their experience. They may not have dealt with matters which required them delivering judgments and passing binding orders after hearing both sides and on questions of law, but, their learning knowledge and experience as Members of the Tribunal would improve their performance by passage of time. This minimal expectation is not fulfilled nowadays and cryptic orders lacking in reasoning and precision are passed day in and day out. We do not know where the fault lies. It is either in the process of selection and appointment or because there is no review and appraisal of the performance of the Tribunal Members from time to time. Whatever may be the cause, the outcome is rendering decisions which leave everything incomplete. Such unsatisfactory state of affairs need to be now brought to the notice of all concerned including the appointing authorities.

With the above observations, the High Court quashed the orders of Tribunal and remanded the matter to Tribunal with a direction to pass a cogent order after considering all the contentions raised by the parties.

(See 2015-TIOL-234-HC-MUM-CX)