CX - Once Tribunal's judgment was affirmed by Apex Court by dismissal of Civil Appeal, Tribunal's order merges with Apex Court order and same becomes binding precedent, whose non-consideration would be mistake apparent from record - ROM allowed: CESTAT
By TIOL News Service
NEW DELHI, AUG 13, 2015: THE appellant had cleared ceramic tiles to different bulk buyers viz. builders, contractual, industrial buyers, hotel, schools, etc. and valued the same u/s 4A of the CEA, 1944 for the purpose of discharging CE duty. It is the allegation of the department that the CE duty ought to have been paid by valuing the goods in terms of the contract price u/s 4 of CEA, 1944.This is because, as per the department, declaration of retail sale price (RSP) was not required on the package cleared by the party to different bulk buyers under contract since such sales were not covered under definition of retail sale under Rule 2(q) of Standards of Weights & Measures (Packaged Commodities) Rules, 1977 being not sold, distributed or delivered through retail sale agencies or other instrumentalities for consumption by an individual or group of individuals or any other consumer.
Resultantly, a demand of Rs.1.49crores was confirmed by CCE, Rohtak with loads of penalty and interest.
The Tribunal while rejecting the appeal of the assesseehad observed -
++ The clearances to different class of bulk buyers was on contracted prices for their use and not for retail sale. It was rightly concluded in adjudication that only due to departmental visit to the factory and scrutiny of invoices in respect of sales to such buyers the facts of supply on contracted price came to the notice. It is general practice in the trade that when the goods are meant for specific use for specific purpose, marking on the packages is done accordingly. But that was not done with the intention of getting the benefit of Rule 34 of PC Rules. Accordingly appellants are not entitled to the assessment of goods under section 4A of the Central Excise Act.
++ Valuation was done by appellant under section 4A with the sole intention to evade payment of duty as is revealed by the factual situation of the case. Suppressing of material facts was manifested resulting in invocation of extended period in terms of first proviso to section 11A of the Act. Once suppression was manifested, appellant was liable to the imposition of penalty and plea of time bar fails.
We reported this order last August as 2014-TIOL-1545-CESTAT-DEL.
Against this order, the appellant had filed a ROM application and the same was decided recently.
The ROM was filed on the following three grounds.
(1) The appellant had specifically pleaded that on the packages of the tiles supplied to the builders, contractors, other industrial buyers there was no such markings mentioning the tiles as for the exclusive use of that industry and not for retail sale and, therefore, the tiles supplied were not exempt from the provisions of SWM (PC) Rules and as such the MRP was required to be declared and, therefore, the duty has been correctly paid on the value determined under section 4 A. But this plea has not been considered by the Tribunal at all.
(2) In response to their query, the legal Metrology Department under its letter dated 13.05.2004 had clarified that Rule 34 (a) of the SWM(PC) Rules does not compel the seller to mark that the goods sold have been specifically packed for industrial use, that if the seller chooses to make such marking in respect of the packages of the goods supplied to industrial buyers, then the product is exempt from the provisions of SWM(PC) Rules but if he does not prefer to make such markings, the provisions of SWM Act and the SWM (PC) Rules would be applicable even if the goods are used as raw-material for the industry. Besides this, the legal metrology department under letter dated 28.02.2005 had advised the appellant that in their case there is no exemption from declaring MRP on the tiles supplied to builders, contractors hotels etc. as they have not marked the packages as per the requirement of Rule 34 (a) and in view of this, the appellant were required to declare MRP on the packages of the tiles supplied to builders, building contractors, housing societies, Hospitals etc. and hence the duty has been correctly paid on the value determined under section 4 A. However this plea has not been considered at all by the Tribunal.
(3) The appellant had brought to notice the judgement in the case of H & R Johnson (India) Ltd. vs. CCERaigad (final order dated 02.05.2014 2014-TIOL-845-CESTAT-MUM wherein an identical issue was involved and the Tribunal in that case had held that in respect of the glazed tiles supplied to industrial users in the packages which were not marked "meant for industrial use, not for retail sale” there was requirement to declare MRP and the duty would be payable on the value determined under section 4A. However, this judgment of the Tribunal has not been considered at all in the Tribunal's order .
The AR opposed the application and submitted that the Tribunal's findings cannot be taken as a mistake apparent from record.
The Bench after considering the submissions made the following observations on the three grounds taken -
+ We find that this plea is not factually correct as while the plea regarding the provisions of Rule 34 (a), has been specifically considered in para 17 of the Tribunals final order, the other plea regarding letter dated 13.05.2004 of the legal metrology department Jhajjar has been considered in para 16 of the Tribunal's order. Once a plea made by the appellant in the grounds of appeal and at the time of personal hearing has been considered by the Tribunal and not accepted, whether rightly or wrongly, this cannot be treated as a mistake apparent from record needing rectification under section 35C(2).
+ This judgment ( H & R Johnson (India) Ltd. vs. CCERaigad reported in - 2014-TIOL-845-CESTAT-MUM ) of the Tribunal had been affirmed by the Apex Court by dismissal of Civil Appeal vide order dated 05.12.2014. Once the Tribunals' judgment is affirmed by the Apex Court by dismissal of Civil Appeal, the Tribunal's judgment merges with the Apex Court order and the same becomes a binding precedent and though the Apex Court's order was passed on 05.12.2014, that is, after the date of pronouncement of the Tribunals order on 08.08.2014, in view of Larger Bench judgment of the Tribunal in the case of Hindustan Lever Ltd. vs. CCE (2006-TIOL-1111-CESTAT-MUM-LB) the Tribunal's judgment dated 08.08.2014 would have to be treated as suffering from a mistake apparent from record.
Adverting to the Bombay High Court decision in Sarla Performance Fibers Ltd. vs. UOI 2008-TIOL-783-HC-MUM-CX where it is held that the Tribunal always has inherent power to do justice, the final order dated 08.08.2014 was recalled and the ROM was allowed.
The registry was directed to list the appeal for final hearing on the limited question of applicability of the Tribunal's judgment in case of H & R Johnson India Ltd. to this case.
In passing: A man who is committed a mistake and doesn't correct it is committing another mistake - Confucius
(See 2015-TIOL-1687-CESTAT-DEL)
