By TIOL News Service

MUMBAI, FEB 26, 2016: THE Appellant is a Company manufacturing MS drums on job work basisfor Hindustan Petroleum Corporation Limited. The period in dispute is 1st March 1992 to 31st March 1993.

The Tribunal had passed the following order -

"6. It is the case, when the Revenue was able to prove that the appellants have cleared 10,37,048 drums to M/s. HPCL and the appellants have paid duty only on 9,02,836 drums as per GP I Gate pass. The said fact has been admitted by the appellants during the course of investigation and the same has not been retracted. In these circumstances, I do not find any reason to interfere with the impugned order and the same is upheld. The appeals filed by the appellants are dismissed."

Inasmuch as by this order of April 2014, the Bench had confirmed the CE duty of Rs.48.46 lakhs and imposed penalty on the company as well as the Deputy Managing Director.

This order is challenged by the appellants before the Bombay High Court.

It is submitted that the statements had been retracted and, therefore, the finding by the lower authorities is incorrect.

The Counsel for the Revenue submitted that the above argument by the appellant is nothing but re-appreciation and reappraisal of factual findings and since the impugned order does not raise any substantial question of law, the Appeals deserve to be dismissed.

Referring to the order of the Tribunal (as extracted earlier), the High Court observed -

++ In reply to show-cause notice, a letter dated 11th August 1997 specifically states at page 91 and after denying the allegations in the show-cause notice that the statement of Mr. Ashok Manibhai Patel, Deputy Managing Director of the Appellant dated 30th December 1996 was given under duress because he was under constant threat that he would be arrested if he did not give confessional statement. Even then he only admitted a fact in part but did not admit that there was any removal of drums without payment of duty. He was arrested on 11th March 1997 and could not immediately retract these statements. Therefore, the showcause notice be dropped as against him.

++ As against this version, the Company also had indicated that it was undertaking a job work. M/s. HPCL will not allow its raw material to be utilized for the manufacture of drums for others or to allow to dispose of the production of drums in any manner other than to supply them. That is how the allegations in paragraph 22 of the show-cause notice regarding deliveries of drums to undisclosed parties was denied and termed as imaginary. ++ Once the job work was the activity undertaken and there was a denial of the liability to pay duty, so also on the above material that the least that is expected of a last fact finding authority, viz., the Customs, Excise & Service Tax Appellate Tribunal is to consider this aspect in detail. That it is factual but necessarily requires and merits its consideration goes without saying, else, a party like the Appellant has no opportunity to satisfy any authority that the adjudication is not in accordance with law and that there is a perversity in the order-in-original. ++ If as an Appellate Authority, the Tribunal does not wish to examine this, then, its refusal raises a substantial question of law. The last fact-finding authority, viz., the Tribunal should have gone by the record. By not considering the record in its entirety and referring to some isolated event that too in an incomplete manner leads us to the only conclusion that the Tribunal has failed to perform its duty and in accordance with law.

++ We do not wish to conclude the matter and to the detriment or interest of either parties for they would lose one valuable right of Appeal in the event of an adverse order.

The order was set aside and the matter was remanded to the Tribunal for decision afresh.

(See 2016-TIOL-376-HC-MUM-CX)