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

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

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.

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

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.

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

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

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