CX - Reasoning given by Tribunal is cryptic and falls short of expected legal standards - no alternative but to quash order: HC
By TIOL News Service
MUMBAI, DEC 21, 2018: THE assessee is in appeal and raises the following two substantial questions of law:-
(i) Whether in the facts and circumstances of the case, the impugned order passed by the CESTAT is correct in upholding the orders-in-original dated 30th April, 2007 and 31st August, 2007 passed by the Commissioner?
(ii) Whether in the facts and circumstances of the case, the impugned order passed by the CESTAT is correct in holding that the appellants failed to produce any document ignoring the relevant evidence which were already on record such as trial balance, certificate of cost account etc.?
The dispute relates to the parts manufactured and cleared from Kandivali factory prior to December, 2003.
It is contended that since separate value of parts of lift is not available, the assessee cleared the parts and components by determining the assessable value under section 4(1)(b) r/w Rule 6(b)(ii) of the Valuation Rules, 1975. The excise duty was paid with effect from 1st July, 2000 on the value of parts determined under section 4(1)(b) r/w Rule 8 of the Valuation Rules, 2000.
The price declarations were filed accompanied by Chartered Accountant's certificates certifying the correctness of the cost of production, based on which, the assessable value has been determined.
The department conducted an internal audit in July/August, 2000 and after detailed verification, was of the prima facie opinion that the research and development expenses incurred by the assessee are includible in the cost of production of the parts and components while calculating the assessable value.
Based on statements and investigation, demand notices came to be issued, both periodical and of extended period, and the same were confirmed by the original authorities. Denovo adjudication also met the same fate. Appeals before CESTAT came to be rejected and, therefore, the assessee is before the Bombay High Court.
It is inter alia submitted that the tribunal observed and held that the assessee had not produced any evidence and which finding is patently erroneous. Inasmuch as there was overwhelming evidence tendered to counter the demand and, therefore, the tribunal had not performed its duty as a last fact finding authority; therefore, this is a fit case for remand.
The counsel for the Revenue supported the tribunal's order and submitted that in view of the concurrent findings of fact, no substantial question of law arises and hence the appeal be dismissed.
The High Court perused the paper book including the order under appeal and observed thus –
++ In a short and cryptic order, which is bereft of complete reasoning, the tribunal proceeds to note these submissions and faults the assessee for not producing documents and working of the head office expenses and the research and development expenses to support the claim. In the same breath, the tribunal says that the adjudicating authority has dealt with all the materials, including the Chartered Accountant's certificates, price list etc. If no evidences were produced, such a finding was impossible.
++ It's reasoning is cryptic and falls short of the expected legal standards. The final fact finding authority was expected to apply its mind independently to the materials before the adjudicating authority. That is but a final opportunity to a litigant like the assessee before us. This court can deal with only substantial questions of law. Once the last or final appellate authority or fact finding authority fails in its duty in law, then, we have no alternative but to quash and set aside its order and remand the case back to it.
The order under appeal was quashed and the matter remanded to the Tribunal for a decision afresh.
(See 2018-TIOL-2640-HC-MUM-CX)
