Gauhati High Court
C.Ex.App./4/2020 on 15 November, 2021
GAHC010133362020
Judgment reserved on : 24th September, 2021
Judgment delivered on : 15th November, 2021
IN THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
C. EX. APPEAL NO.4 OF 2020
The Commissioner of Central Goods &
Service Tax, Milan Nagar, Lane 'F', P.O. C.R.
Building, Dibrugarh-786003.
........Appellant
-Versus-
M/s Pan Parag India Limited (Formally
known as M/s Kothari Products Ltd.) Pan Parag
House, 24/19, The Mall, Kanpur, Uttar Pradesh-
208001.
........Respondent
-BEFORE-
HON'BLE THE CHIEF JUSTICE MR. SUDHANSHU DHULIA
HON'BLE MR. JUSTICE SOUMITRA SAIKIA
Advocate for the appellant : Mr. S.C. Keyal,
Senior Advocate.
Advocate for the respondent : Dr. A. Saraf,
Senior Advocate.
C. Ex. Appeal No. 4 of 2020
Page 1 of 24
JUDGMENT AND ORDER (CAV)
(Soumitra Saikia, J)
This Central Excise appeal preferred by the Commissioner of
Central Goods & Service Tax and Central Excise as the appellant
arises out of the order dated 18.12.2019 passed by the Customs,
Excise and Service Tax Appellate Tribunal (hereinafter referred as
"CESTAT"), Eastern Regional Bench, Kolkata.
2. The brief facts necessary to decide this Appeal are as under:
(i) The assessee namely the respondent herein is
engaged in the manufacture of Pan Masala and Pan
Masala containing tobacco classifiable under Chapters 21
and 24 of the First Schedule to the Central Tariff Act,
1985 at its factory situated at Jorhat, Assam. The
appellant is availing the benefit of exemption under
Notification No. 8/2004-CE dated 21.01.2004, as
amended by Notification No. 28/2004-CE dated
09.07.2004. The period in dispute in this appeal is from
March 2004 to March 2005.
(ii) Order dated 06.02.2007 was issued by the
Commissioner whereby the direction was made for
recovery of amount deposited in the Escrow account by
C. Ex. Appeal No. 4 of 2020
Page 2 of 24
way of forfeiture for the alleged violation of the
conditions of the exemption notification availed by the
appellant as aforesaid. Against the said order, in the
appeal filed by the assessee, the Tribunal vide Order
dated 06.08.2007 remanded the matter back to the
Commissioner for fresh consideration since the aforesaid
orders were issued without granting opportunity of
being heard in violation of principles of natural justice.
(iii) Pursuant to the Tribunal's Order dated 06.08.2007,
the Commissioner re-decided the matter in remand
proceedings vide Order dated 30.01.2008, whereby it
confirmed the forfeiture of amount deposited in Escrow
account consequent to findings made with regard to
violation of conditions of exemption notification and
allowed the assessee to take the CENVAT Credit back to
their account which the assessee had utilized at the time
of clearance of goods during the relevant period.
(iv) Thereafter, the Revenue challenged the Order dated
30.01.2008 passed by the Commissioner before the
Tribunal on the ground that the same travelled beyond
the scope of the directions made by the Tribunal vide
C. Ex. Appeal No. 4 of 2020
Page 3 of 24
previous Order dated 06.08.2007. In the said appeal by
the Revenue, the Tribunal in its order dated 17.03.2015
noted that the other Show Cause Notices issued for
disallowing CENVAT Credit were pending in parallel
proceedings which were not considered by the
Commissioner. On the said observations, the Tribunal
again set aside the order dated 30.01.2008 passed by
the Commissioner and remanded the matter for fresh
consideration on the point of admissibility of CENVAT
Credit.
(v) The Commissioner re-decided the matter and vide
Order dated 31.03.2017 held that the assessee had
violated the conditions of the exemption notification as
was already decided in previous Order-in-Original dated
30.01.2008 which had attained finality. He further held
that the charges framed against the assessee for wrong
utilization of credit during the period March 2004 to
March 2005 had already been dropped by the then Addl.
Commissioner, Central Excise, Dibrugarh, vide Order no.
02/Addl. COMMR/ADJ/CE/DIB/09 dated 30.01.2009 and
that there is no pending Show Cause Notice issued to
C. Ex. Appeal No. 4 of 2020
Page 4 of 24
the appellant assessee in relation to admissibility of
Cenvat Credit. Based on above observation, the
Commissioner had concluded that since proceedings for
alleged wrong credit had already been dropped, the
question of further allowing credit does not arise at all.
(vi) Being aggrieved, by the order of the
Commissioner, the assessee preferred an appeal before
the Tribunal. The Tribunal vide the impugned order
dated 18.12.2019 held that in the earlier proceedings,
the material facts that the eligibility of credit utilized by
the assessee which stood decided in favour of the
assessee vide Additional Commissioner's order dated
30.01.2009 were not before the Tribunal earlier. The
Tribunal held that the Commissioner was therefore, not
required to re-decide the Credit Eligibility of the
impugned order. The Tribunal, therefore, held that the
amount paid by the assessee by Challan cannot be
retained by the Department and is liable to be refunded.
The appeal was, accordingly, dismissed.
3. Being aggrieved, the present appeal has been filed by the
Department on the substantial questions of law urged. The
C. Ex. Appeal No. 4 of 2020
Page 5 of 24
learned counsel for the appellant submits that vide the Order-in-
Original No. 01/COMMR/ADJ/CE/DIB/08 dated 30.01.2008, the
forfeiture of the amount of Rs. 98,89,695.00 and Rs.3,88,344.65
makes the total amount forfeited as Rs. 1,02,92,040.00 (Rupees
One Crore Two Lakh Seventy two Thousand Forty only). As such
the amount being above the monetary limit prescribed by the
Ministry of Finance vide instructions of Ministry of Finance,
Department of Revenue, Central Board of Indirect Taxes &
Customs dated 22.08.2019 fixing the monetary limit of Rs. 1
Crore as the limit below which Appeals cannot be filed before
High Court, it does not debar the Department from maintaining
the present Appeal.
On merits, the learned counsel for the appellant submits
that in terms of Notification No. 08/2004 as amended by
Notification No. 28/2004-CE dated 09.07.2004, since the amounts
were not deposited by the manufacture/assessee within 60 days
from the end of relevant quarter, the amounts were forfeited by
the Department. The learned counsel for the appellant submits
that the proceedings before the Additional Commissioner, Central
Excise were dropped vide its order dated 30.01.2009 by observing
that payment of duty made through PLS of Rs. 1.49 Crore was as
C. Ex. Appeal No. 4 of 2020
Page 6 of 24
good as non-availment of CENVAT credit on the goods cleared.
Therefore, the Additional Commissioner held that the CENVAT
credit was not admissible on goods (Gutkha) as per Rule 6 of the
CENVAT Credit Rules, 2004. However, as the assessee had paid
through cash, it was considered that assessee neither availed
CENVAT credit nor utilized the inadmissible CENVAT credit to the
tune of Rs. 1.49 Crore and accordingly, the authorities although
had brought in those protective demands, the same were dropped
vide the order dated 30.01.2009. The learned counsel for the
appellant, therefore, submits that as per Cenvat Credit Rules,
2004, the assessee was not eligible for availment and utilization
and CENVAT credit and accordingly, question of reversal/refund of
CENVAT Credit as directed by the Tribunal, does not arise as
assessee did not make any double payment. Therefore, the
Tribunal erred in holding that there was double payment of duty
both by Challan and through CENVAT credit. Consequently it is
submitted that the direction of the Tribunal to the Department to
refund back the deposit made by the assessee is erroneous and
contrary to law and should therefore be set aside and quashed.
4. The learned counsel for the assessee raised his objections
to submit that this appeal is not maintainable in view of the
C. Ex. Appeal No. 4 of 2020
Page 7 of 24
Monetary involvement being lower than one crore as notified by a
Instruction issued by Central Board of Indirect Taxes & Customs
(CBIT&C) dated 22.08.2019. The learned Senior counsel for the
assessee submitted that the monetary limit of Rs. 1 crore and
above has been fixed by the Finance Department in respect of
appeals to be filed by the Department/Government before the
High Court. The effect of the circular is that only appeals where
the financial involvement is beyond Rs. 1 Crore, can the
Department prefer any appeal before the High Court. The learned
Senior counsel appearing for the assessee submitted that in this
appeal, the financial involvement is Rs.98,83,695.35/- only and as
such in terms of the Ministry of Finance Instructions dated
22.08.2019, the monetary limit involved in this matter being
below Rs. 1 Crore, the appeal is not maintainable and the same
should be dismissed in Limine as not maintainable.
Notwithstanding that the learned Senior counsel submits that
even on merits this Appeal is not maintainable as there are no
substantial questions which arises in the facts of the case which
require any deliberation. The dispute sought to be agitated by the
appellant relates to factual issues which have been correctly
arrived at by the Tribunal. As per the mandate of Section 35G of
the Central Excise Act; appeals to the High Court can be admitted
C. Ex. Appeal No. 4 of 2020
Page 8 of 24
only on substantial questions of law. The learned Senior counsel
for the assessee submits that as there are no substantial
questions of law made out, the appeal merits dismissal in Limine.
The learned Senior counsel for the appellant has referred to the
Judgment of the Apex Court in Commissioner of Income Tax
vs. Hotel & Allied Trades Pvt. Ltd, reported in (2019) 18
SCC 735 to buttress his submissions.
5. We have heard the learned counsels for the parties and we
have also perused the pleadings on record. Since the question of
maintainability of the appeal is raised, we propose to examine the
issue of maintainability at the outset. The objections regarding
maintainability of the present appeal is raised by the learned
Senior Counsel for the respondent on the basis that where the
monetary involvement is below Rs. 1 Crore as notified by the
Central Board of Indirect Taxes & Customs (CBIT&C) circular
dated 22.08.2019, Appeals before the High Court are not
maintainable. The notification is extracted below for convenience:
"F. No. 390/Misc/116/2017-JC
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes & Customs
(Judicial Cell)
*******
'B' Wing, 4th Floor, HUDCO VISHALA Building
Bhikaji Cama Place, R.K. Puram, New Delhi-66
To
C. Ex. Appeal No. 4 of 2020
1. All Principal Chief Commissioners/ Chief Commissioners/ Principal
Commissioners/ Commissioners of Customs/ Customs (Preventive)/
GST & CX;
2. All Principal Director Generals/ Director Generals under CBIC;
3. Chief Commissioner (AR); Commissioner (Legal), Principal
Commissioner, Directorate of Legal Affairs, CBIC;
4. [email protected]
Subject: Reduction of Government Litigation -Raising of monetary
limits for filing appeals by the Department before CESTAT/High Courts
and Supreme Court in Legacy Central Excise and Service Tax-regarding.
In exercise of the powers conferred by Section 35R of the Central
Excise Act, 1944 and made applicable to Service Tax vide Section 83 of
the Finance Act, 1994, the Central Board of Indirect Taxes and Customs
fixes the following monetary limits below which appeal shall not be filed in
the CESTAT, High Courts and Supreme Court.
S. Appellate Forum Monetary Limit
No.
1. CESTAT Rs. 50,00,000/-
2. High Courts Rs. 1,00,00,000/-
3. Supreme Court Rs. 2,00,00,000/-
2. This instruction applies only to legacy issues i.e. matters relating
to Central Excise and Service Tax, and will apply to pending cases as well.
3. Withdrawal process in respect of pending cases in above forums,
as per the above revised limits, will follow the current practice that is
being followed for the withdrawal of cases from the Supreme Court, High
Courts and CESTAT. All other terms and conditions of concerned earlier
instructions will continue to apply.
4. It may be noted that issues involving substantial questions of law
as described in para 1.3 of the instruction dt 17.08.2011 from F. No.
390/Misc/163/2010-JC would be contested irrespective of the prescribed
monetary limits.
5. Since withdrawal of Departmental Appeals is a long drawn
activity requiring routine and constant monitoring, formats have been
introduced in the Monthly Performance Report for all field formations
to send monthly reports regarding status of withdrawal of appeals in the
MPR (refer table P/P-1). Details of the said cases should also be available
in a separate register for further perusal by the Board as and when
required. Tables are in the Annexure-A attached. The description of the
Tables in brief is provided below.
a) Table P: Position of withdrawal with reference to raised monetary
limits SC/HC/CESTAT (as per instruction dated 22/08/2019)
b) Table P-1: Remaining to be filed/withdrawn SC/HC/CESTAT.
Sd/-
(Rohit Singhal)
Director (Review)"
6. It is seen from a perusal of the circular that the monetary
limit has indeed been prescribed for the Department, below which
C. Ex. Appeal No. 4 of 2020
no Appeals can be filed. In so far as the High Court is concerned,
the Monetary Limit prescribed is 1(one) Crore below which no
Appeals can be filed before the High Court. However, Clause 4 of
the said instructions prescribes that where substantial questions
of law are involved, the matters will be contested irrespective of
Monetary Limit prescribed. The submissions of the learned Senior
counsel for the assessee that the financial involvement in the
present proceedings is Rs.98,83,695.35/- is disputed by the
counsel for the appellant submitting that the financial involvement
in the present proceedings is beyond Rs. 1 Crore as the demand
comprises of Rs.98,83,695.35/- as well as Rs.3,88,344.65/- and
as such, it is not below that monetary limit of Rs. 1 Crore. Further
the learned counsel for the appellant contended that the
impugned order dated 18.12.2019 of the CESTAT, if allowed to
stand will have serious consequences. Considering the
submissions advanced at the Bar, we find that the restrictions of
"monetary limit" is not an absolute bar. In matters where a
common principle may be involved, the High Court can entertain
appeal subject of course to the provisions of Section 35G of the
Central Excise Act. In Commissioner of Income Tax, Central
III vs. Surya Herbal Limited, reported in (2011) 15 SCC
482, the Apex Court was examining the applicability of the
C. Ex. Appeal No. 4 of 2020
circular dated 09.02.2011 in respect of Appeals filed by the
Income Tax Department where the Tax effect was below the
prescribed limit. The Apex Court held that where any matter is
likely to have a cascading effect and in which a common principle
may be involved in subsequent group of matters or a large
numbers of matters, the embargo prescribed by the Circular dated
09.02.2011 need not be applied ipso facto. In that view of the
matter, we decline to reject the present appeal at the threshold
on the issue of maintainability from the point of view of being
below the monetary limit prescribed. We, therefore, proceed to
examine the appeal on merits.
7. The following substantial questions of law have been raised
by the appellant:-
A. Whether the Hon'ble CESTAT, Kolkata is correct in
holding that the duty payment made by the
assessee through CENVAT credit is proper and
admissible ignoring the conditions stipulated in Rule
6 of CENVAT credit Rules 2004.
B. Whether Hon'ble CESTAT has erred in allowing
the refund of the duty paid through TR- 6 challan.
C. Ex. Appeal No. 4 of 2020
C. Whether Hon'ble CESTAT has erred in setting
aside the decision of the Ld. Commissioner issued
vide OIO No. 07/ADJ/CE/DENOVO/CINNR/DIB/17
dated 31.03.2017 ordering not to allow further
CENVAT credit for the period March, 2004 to March,
2005.
D. Whether Hon'ble CESTAT, Kolkata has erred in
not appreciating the ratio laid down by the Hon'ble
Apex Court in the civil appeal no. 3327/2007 in the
matter of Commissioner of Customs, Mumbai -Vs-
Dilip Kumar and Company & Ors which is also
squarely applicable in the instant case.
8. A reference to Section 35G of the Central Excise Act, 1944
shows that an appeal shall lie to the High Court from every order
passed by an appellate Tribunal provided that the High Court is
satisfied that the matter involves substantial questions of law. The
appeal under Section 35G is a qualified appeal and not an
absolute and/or unqualified and/or unrestricted appeal. Unless,
therefore, an appeal involves a substantial question of law, no
appeal can be entertained by the High Court from the order
C. Ex. Appeal No. 4 of 2020
passed in an appeal by an appellate Tribunal. For convenience
Section 35G of the Central Excise Act, 1944 is extracted below:
"35G. Appeal to High Court- (1) An appeal
shall lie to the High Court from every order passed in
appeal by the Appellate Tribunal on or after the 1st
day of July, 2003 (not being an order relating, among
other things, to the determination of any question
having a relation to the rate of duty of excise or to the
value of goods for the purposes of assessment), if the
High Court is satisfied that the case involves a
substantial question of law.
(2) The Commissioner of Central Excise of the other
party aggrieved by any order passed by the Appellate
Tribunal may file an appeal to the High Court and such
appeal under this sub-section shall be-
(a) filed within one hundred and eighty days from the
date on which the order appealed against is received
by the Commissioner of Central Excise or the other
party;
(b) accompanied by a fee of two hundred rupees
where such appeal is filed by the other party;
(c) accompanied by a fee of two hundred rupees
where such appeal is filed by the other party;
(d) in the form of a memorandum of appeal precisely
stating therein the substantial question of law
involved."
9. In so far as the finding of facts arrived at by the Tribunal is
concerned, the same ordinarily cannot be gone into by the High
Court as the Tribunal is the final fact finding authority. It is for the
Tribunal to find facts and for the High Court to lay down the law
as applicable to the facts found. The High Court has no
C. Ex. Appeal No. 4 of 2020
jurisdiction to go behind or question the facts found by the
Tribunal unless on the ground of perversity. The Apex Court in
Karnani Properties Ltd. vs. Commissioner of Income Tax,
reported in 82 ITR 54 while examining a question under the
Income Tax Act which was to the effect that whether the Tribunal
was justified in arriving at a particular finding of fact held as
under:
".......... The question as to the correctness of the facts
found by the Tribunal was not before the High Court
nor is it before us. When the question referred to the
High Court speaks of on the facts and in the
circumstances of the case, it means on the facts and
circumstances found by the Tribunal and not about the
facts and circumstances that may be found by the High
Court. We have earlier referred to the facts found and
the circumstances relied on by the Tribunal, the final
fact finding authority. It is for the Tribunal to find facts
and it is for the High Court and this Court to lay down
the law applicable to the facts found. Neither the High
Court nor this Court has jurisdiction to go behind or to
question the statements of fact made by the Tribunal.
The statement of the case is binding on the parties and
they are not entitled to go-behind the facts found by
the Tribunal in the statement."
10. As discussed above, as per the mandate of the amended
Section 35G of the Central Excise Act that there must be a
substantial question of law in order to prefer an appeal before the
High Court against the order of the Tribunal. The Apex Court
C. Ex. Appeal No. 4 of 2020
while dealing with the provisions of Section 260A of the Income
Tax Act, 1961, where the provisions of appeal to the High Court
are parimateria with the provisions of Section 35 of the Central
Excise Act; held that the conditions mentioned in Section 260A
must be strictly fulfilled before an appeal can be maintained under
Section 260A. The Apex Court held that if the appellant is unable
to show that a substantial question of law has arisen for
determination, there is no impediment on the part of the High
Court to dismiss the appeal without even admitting the appeal.
The Apex Court in M. Janardana Rao vs. Joint Commissioner
of Income Tax, reported in (2005) 2 SCC 324 has laid down
the tests to determine as to whether a substantial question of law
is involved. The Apex Court held that the High Court must make
every effort to distinguish between a question of law and a
substantial question of law. The Apex Court held in the context of
Section 260A that the findings of fact of the Tribunal cannot be
disturbed. The relevant paragraphs of the said Judgment is
extracted below:
"14. Without insisting on the statement of
substantial question of law in the memorandum of
appeal and formulating the same at the time of
admission, the High Court is not empowered to
generally decide the appeal under Section 260-A
C. Ex. Appeal No. 4 of 2020
without adhering to the procedure prescribed under
Section 260-A. Further, the High Court must make
every effort to distinguish between a question of law
and a substantial question of law. In exercise of
powers under Section 260-A, the findings of fact of
the Tribunal cannot be disturbed. It has to be kept
in mind that the right of appeal is neither a natural
nor an inherent right attached to the litigation.
Being a substantive statutory right, it has to be
regulated in accordance with law in force at the
relevant time. The conditions mentioned in Section
260-A must be strictly fulfilled before an appeal can
be maintained under Section 260-A. Such appeal
cannot be decided on merely equitable grounds.
15. An appeal under Section 260-A can only be in
respect of a "substantial question of law". The
expression "substantial question of law" has not
been defined anywhere in the statute. But it has
acquired a definite connotation through various
judicial pronouncements. In Sir Chunilal V. Mehta &
Sons Ltd. v. Century Spg. & Mfg. Co. Ltd. [1962
Supp (3) SCR 549 : AIR 1962 SC 1314] this Court
laid down the following tests to determine whether
a substantial question of law is involved. The tests
are: (1) whether directly or indirectly it affects
substantial rights of the parties, or (2) the question
is of general public importance, or (3) whether it is
an open question in the sense that the issue is not
settled by pronouncement of this Court or Privy
Council or by the Federal Court, or (4) the issue is
not free from difficulty, and (5) it calls for a
discussion for alternative view. There is no scope for
interference by the High Court with a finding
recorded when such finding could be treated to be a
finding of fact."
C. Ex. Appeal No. 4 of 2020
11. In the light of law laid down by the Apex Court, the
substantial questions of law as urged by the appellant in the
present proceedings will have to be examined.
12. We have carefully perused the substantial questions of law
presented by the appellant. It is seen that substantial questions
A, B and C pertains to allowing of CENVAT credit. A perusal of the
order dated 31.03.2017 passed by the Commissioner, will reveal
that the show-cause Notices which were issued against the
assessee for wrong utilization of credit during the period of March,
2004 to March, 2005 has already been dropped by the Additional
Commissioner, Central Excise, Dibrugarh vide order dated
30.01.2009 and there is no pending show cause Notice issued to
the assessee in relation to admissibility of CENVAT credit. The
findings of the Additional Commissioner, Central Excise, Dibrugarh
vide order dated 30.01.2009 that the charges framed against the
assessee for wrong utilization of credit during the period of March,
2004 to March, 2005 were dropped had not been challenged or
questioned by the Department before CESTAT and such findings
of the Addl. Commissioner having attained finality, there was no
scope for the CESTAT to re-examine the issues, more particularly,
in an appeal, which is preferred by the assessee. Further the
C. Ex. Appeal No. 4 of 2020
Additional Commissioner, Central Excise, Dibrugarh, in its Order-
in-Original dated 30.01.2009 had returned a finding that the
assessee had paid duty two times- one debited from CENVAT
Account and the other by Cash Deposit to the extent of Rs.1.49
Crore and which is as good as non-availment of CENVAT Credit on
such goods cleared. The Additional Commissioner accepted the
submissions of the assessee and came to the conclusions that
penal provisions are not attracted. He, therefore, proceeded to
drop the charges against the assessee and the show-cause
Notices were accordingly disposed of. In the face of such findings
of fact arrived at by the Addl. Commissioner in its Order-in-
Original dated 30.01.2009 which had remained unassailed by the
Department before a higher forum in the absence of any specific
finding to the contrary, there cannot be any presumption that the
CENVAT Credit claimed by the assessee was contrary to the
provisions of Rule 6 of CENVAT Credit Rules, 2017 which provides
for the conditions for availing CENVAT Credit. As such, there was
no occasion to re-decide the credit eligibility of the assessee on
the relevant period that too without issuance of fresh Show Cause
Notices on the assessee. As such the Tribunal had correctly
rendered a finding that the benefit of exemption has been denied
to the assessee. Since, as discussed above, the findings arrived at
C. Ex. Appeal No. 4 of 2020
by the Addl. Commissioner, Central Excise, Dibrugarh in its Order-
in-Original dated 30.01.2009 were not challenged by the
Department before any higher forum, the same had therefore
attained finality. The findings of the Tribunal in allowing the
refund of duty paid through TR-6 challan is not in conflict with the
conditions mentioned in the exemption Notification No. 08/2004
dated 21.01.2004 issued by the CBIT&C read with Notification No.
28/2004 dated 09.07.2004 and Rule 6 of the CENVAT Credit
Rules, 2004. Accordingly, we do not find any substantial questions
of law in respect of Question Nos. A, B and C as sought to be
raised by the appellant.
13. In so far as the substantial question 'D' is concerned, the
appellant has referred to the Judgment of the Apex Court in
Commissioner of Customs (Imports), Mumbai -Vs- Dilip
Kumar and Company and Ors, reported in (2018) 9 SCC 1 to
submit that the impugned order of Judgment of the
CESTAT/Tribunal is in violation of the ratio laid down by the Apex
Court in this case .
14. We have carefully perused the Judgment of the Apex Court
in Dilip Kumar (Supra), the ratio in the said Judgment lays down
the principle for interpretation of taxing statute as well as the
C. Ex. Appeal No. 4 of 2020
exemption provisions or exemption notification. The Apex Court
has held that the question whether the assessee falls within the
notification or the exemption clause, has to be strictly construed
and when once the ambiguity or doubt is resolved by interpreting
the applicability of exemption clause strictly, the Court may
construe the notification by giving full play bestowing wider and
liberal construction. We respectfully agree with the ratio laid down
by the Apex Court in Dilip Kumar (Supra) as there is no quarrel
with the proposition laid down in the said matter. However, in
view of the peculiar facts involved in the present proceedings, the
appellant cannot draw any support from the said case cited. In
the present proceedings as already discussed above, there are
findings of fact arrived at by the Addl. Commissioner vide its
Order-in-Original dated 30.01.2009 whereby a finding was
returned that assessee had paid the duty two times- one debited
from CENVAT Account and other by Cash Deposit to the extent of
Rs. 1.49 Crore and which is as good as non-availment of CENVAT
Credit on such goods cleared. On the basis of the such clear
findings of fact arrived at by the Addl. Commissioner, Central
Excise, the Show Cause Notices issued to the assessee were
dropped and the matter was accordingly disposed of. The said
findings of the Addl. Commissioner was never assailed before the
C. Ex. Appeal No. 4 of 2020
appropriate forum by the Department. Consequently, the same
having attained finality, there was no occasion for the Tribunal to
interpret as to whether the assessee was nor was not entitled to
CENVAT Credit in an appeal preferred by the assessee.
Furthermore, there are no averments or submissions made by the
appellant as to how the exemption notifications were
misinterpreted by the Tribunal contrary to the ratio laid down by
the Apex Court in Dilip Kumar(Supra). We therefore hold that the
question 'D' also does not raise any substantial question of law.
15. The issue of wrong utilization of credit by the assessee
during the period of March, 2004 to March, 2005 having been
already dropped by the Additional Commissioner, Central Excise,
Dibrugarh vide order dated 30.01.2009 and no appeal having
been preferred by the Department against such finding, the
matter has attained finality. The said finding of fact is also
accepted by the Commissioner, Central Excise as is seen in the
order dated 31.03.2017. The Tribunal, therefore, recorded such a
finding and held that the Commissioner, Central Excise, Dibrugarh
instead of arriving at the conclusion that the credit cannot be
further allowed, which was never before him, ought to have
appreciated the fact of payment of amount by challan as well as
C. Ex. Appeal No. 4 of 2020
by credit utilization has been made by the appellant.
Consequently, no substantial question of law arises in this appeal
and we are therefore, not persuaded to accept this appeal in view
of the mandate of Section 35G of the Central Excise Act, 1985.
16. Before parting, we would like to observe that although it
was not pleaded specifically in the appeal that the Judgment of
the Tribunal suffered from perversity because of wrong
appreciation of facts, however it was orally submitted by the
learned counsel for the appellant that the Judgment of the
Tribunal is perverse and should be therefore suitably interfered
with.
17. The provisions of Section 35G mandates that an appeal
under Section 35G of the Central Excise Act can only be
admitted/heard by the High Court only on the substantial question
of law framed. However, in the present proceedings, there was no
substantial question of law framed by the appellant with regard to
the 'perversity' as raised by the appellant. Notwithstanding such a
question not being specifically framed by the appellant, it is
certainly open for the Court to frame such substantial question of
law subject, however, to such pleadings being available to
demonstrate as to how the impugned order of the Tribunal suffers
C. Ex. Appeal No. 4 of 2020
from perversity. In the absence of such specific pleadings or
reference to such facts to demonstrate as to how the facts were
not appreciated or wrongly appreciated by the Tribunal, there
cannot be any substantial question of law with regard to the
perversity framed. The findings of fact recorded by the Court can
be held to be perverse if such findings have been arrived at by
wrong appreciation of facts and ignoring relevant materials or
taking into consideration irrelevant materials. The Apex Court in
S.R. Tewari -Vs- Union of India, reported in (2013) 6 SCC
602 held that if the decision is arrived at on the basis of no
evidence or thoroughly unreliable evidence and no reasonable
person would act upon it, the order would be perverse. The Apex
Court held that if there is some evidence on record which is
acceptable and which could be relied upon, the conclusions would
not be treated as perverse and the finding would not be interfered
with.
18. In view of all the above discussions, we find no merit in this
appeal and the same is, accordingly, dismissed.
19. No order as to costs.
JUDGE CHIEF JUSTICE
Comparing Assistant
C. Ex. Appeal No. 4 of 2020
