Telangana High Court
Orchid Exports vs Commissioner Of Customs on 15 February, 2024
Author: P.Sam Koshy
Bench: P.Sam Koshy, N.Tukaramji
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE N.TUKARAMJI
CENTRAL EXCISE APPEAL No.5 of 2022
JUDGMENT:
(per Hon'ble Sri Justice P.SAM KOSHY) The challenge in the present Appeal is to the order dated 11.03.2022 passed by the Appellate Tribunal in Miscellaneous Application No.E/ROM/30594/2019 in Appeal No.E/41/2009 arising out of Order- in-Original No.18/2008-CE-Hyd-III-Commr. Dated 17.09.2008 passed by CCCE, Hyderabad-III Commissionerate.
2. Heard Sri K. Vijay Kumar, learned counsel for the appellant and Sri Dominic Fernandes, learned senior standing counsel for the respondent-Department.
3. The facts of the case is that there was an Original Order of demand dated 17.09.2008 passed by the respondent, confirming a demand of Rs.1,09,15,575/- along with penalty of equal amount. The said order was subjected to challenge before the Central, Excise and Service Tax Appellate Tribunal (CESTAT), registered as Appeal No.E/41/2009. The 2 Appellate Tribunal after hearing the parties reached to the conclusion that since there was a non-compliance of the requirement as is envisaged under Section 9D of the Central Excise Act, 1944 (for short "the Act, 1944"), following a decision of the High Court of Punjab & Haryana in case of Ambica International and another judgment from the High court of Chattisgarh in case of Hi Tech Abrasives Ltd., without expressing any opinion on the merits of the case, the matter was remitted back to the adjudicating authority to re-consider the issue afresh leaving all the issues open. This order was further assailed by the appellant in an appeal before this High Court registered as CEA No.47 of 2019. The Division Bench of this Court disposed of the appeal permitting the appellant- assessee to appear before the Tribunal by moving an application under Section 35C(2) of the Act, 1944 and the Tribunal in turn was directed to consider the appeal of the appellant and pass appropriate orders.
4. The grievance of the appellant at the first instance before the High Court was only that, perhaps the Tribunal has wrongly made an observation that it was the request made on behalf of the appellant before 3 the CESTAT for remanding the matter as would be reflected from the contents of paragraph 3 in the order dated 28.02.2019. In terms of the directions given by the High Court in the said CEA No.47 of 2019, the appellant herein entered appearance before the Tribunal and moved an appropriate application which was registered as Miscellaneous Application No.E/ROM/30594/2019. It is this M.A which stands decided vide impugned order dated 11.03.2022, against which, the appellant has preferred the present appeal. The appellant seems to be primarily aggrieved so far as the view of the Tribunal by again remitting it back to the adjudicating authority after so long a period, which by now is almost two decades of time. According to the petitioner, no fruitful purpose would be served on the remand as made by the Tribunal. It was contended that the Department would not be able to meet the requirement that what is envisaged in Section 9D of the Act, 1944. It was prayed by the appellant that since admittedly there was a violation of Section 9D at the first instance, the Order-in-Original itself would be set aside by this Court without further remand being made. 4
5. Learned counsel for the appellant contended that there are judicial precedents which would show that after a long lapse of time, the proceedings have been dropped by the Tribunals and High Courts only taking into consideration the practical difficulties that would be faced in meeting the requirement as is envisaged under Section 9D of the Act, 1944.
6. Without entering into further dispute or issues that have been raised by the appellant, we are of the considered opinion that in fact, the Tribunal at the first instance vide its order dated 28.02.2019 itself had made the order of remand for the reason of the Order-in-Original being violative of non-compliance of Section 9D of theAct, 1944.The said order of remand was questioned by the appellant before the High Court in CEA No.47 of 2019. The challenge in CEA No.47 of 2019 was not that of the remand made but was only on the ground on which remand was made where the Tribunal had mentioned that it was the counsel for appellant herein who had made a request before the Tribunal for remanding the matter back. It was only that dispute which was 5 considered by the High Court in CEA No.47 of 2019 when it was disposed of by the Division Bench on 27.09.2019. As has been enumerated earlier, the High Court while disposing of CEA No.47 of 2019 permitted the appellant to move an appropriate application for rectification before the Tribunal. The rectification is only to the extent of the observation made in paragraph 3 so far as the remand being sought by the counsel for the appellant is concerned. It was this rectification application which was dealt with by the Tribunal while passing the impugned order. While passing the impugned order, the Tribunal accepted the contention of the appellant so far as they having not made a request for the remand but it was in the circumstances of the case that the Tribunal felt that rectification was necessarily to be made and correction has been accepted so far the said observation of the Tribunal at the first instance in its order dated 28.02.2019. However, the Tribunal did not touch into the final outcome of the original order of remand that was made on 28.02.2019.
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7. The contention of the appellant herein is that as far as it would be practically impossible now after more than two decades period for the Department to ensure compliance as is required under Section 9D of the Act is concerned, we carefully went through the findings given by the Tribunal while passing the impugned order. For ready reference the observations made in paragraphs 5 to 8 of the Tribunal are as under:
"5. Therefore, we find it necessary to come the a paragraph 3 of the Final order to reflect the above submission. The next question is whether recording such submission of the learned counsel should also result in an amendment in the operativepart of the order. We note the submission of the appellant that no useful purpose would be served by remanding the matter but we are in no position to predict the outcome of the remand proceedings nor are we willing to speculate the possible outcome of remand proceedings and take a final decision based on such speculation. We are inclined to accept the prediction by the learned course f outcome of the remand proceedings. We cannot, therefore, conclude whether any useful purpose would be served or not if the procedure prescribed under section 9D is followed and the remand proceedings are completed.
6. On the other hand, we find that no prejudice would be caused to the appellant if this procedure is completed since the impugned order has already been set aside by the remand order vide Final Order of this Tribunal. At present, there is no liability on the appellant. After following the procedure under section 9D and the remand proceedings are completed and no useful purpose gets served and Revenue's case is not established (as predicted by the learned counsel), the appellant will still not be put to any loss and Revenue will not gain anything. If 7 Revenue's case is established and the demand sustains, then Revenue will get the Revenue due to it and the appellant will have to discharge its burden.
7. At the most, the appellant may face the inconvenience of having to go through the remand proceedings before the Commissioner, prepare for and cross examine the persons whose statements were recorded, etc. It is equally true that the Commissioner will have to go through the process and summon and examine the persons whose statements are recorded. Such Inconvenience of either side cannot, in our considered view, be a ground to stop the due process and pre-decide the outcome of the remand proceedings and conclude that no useful purpose would be served. We also find that in the final order, the ratio of Ambika International judgment of Hon'ble High Court of Punjab and Haryana was followed in which the matter was remitted for not following the procedure prescribed in section 9D. For all these reasons, the operative part of the Final Order requires no change.
8. Accordingly, the application for Rectification of Mistake filed by the appellant is disposed of as follows:
In paragraph 3 of the Final Order for the words "He would submit that the matter be remitted back to the adjudicating authority to follow the provisions of Section 9D of Central Excise Act, 1944 an subsequently come to the conclusion after following the principles natural justice.", the words "He would submit that no useful purpose would be served by remitting the matter back to the original authority after 16 years and hence the appeal may be allowed and the Impugned order set aside. We are unable and unwilling to predict the outcome of the remand proceedings nor are we willing to take a decision based on the prediction of the outcome by the learned counsel." shall be substituted".
8. The plain reading of the observations made by the Tribunal particularly that which is reflected in paragraphs 6 and 7 above of the 8 reproduced portion would clearly indicate that this very submissions of the appellant were extensively dealt with and considered by the Tribunal and it reached to the conclusion. Though it appears to be difficult because of the long laps of time but it would still be difficult to close the case on assumptions and predictions. Insofar as the capability of the respondent in meeting the requirement as is required under Section 9D of the Act, 1944 is concerned, the reasons given by the Tribunal by no means can be said to be unreasonable in any manner.
9. True it is that we also feel that much time has lapsed since proceedings had originally initiated. Yet since there an order of demand made by the Tribunal permitting the respondent/Department to ensure compliance of the Section 9D of the Act, 1944 before passing the order afresh, it is for the Department to make all efforts in ensuring that if at all they intend to pursue with the proceedings against the appellant, they will have to ensure strict compliance of Section 9D of the Act, 1944. Under no circumstances, we find that the observations made by the 9 Tribunal to be bad or which does not have proper justification and reasons.
10. For the aforesaid reasons, we do not find any strong case made out by the appellant calling for interference of the impugned order of remand being made.
11. The appeal fails and dismissed. No order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed.
___________________ P.SAM KOSHY, J __________________ N.TUKARAMJI, J Dated: 15.02.2024 gvl