CA Bimal Jain
Department cannot raise same grounds in the second round of ligation when the grounds taken in the first round of litigation were disposed of and no appeal was filed against the Order pertaining to first litigation
Star Industries Ltd. (“the Appellant” or “the Company”) is a manufacturer of PVC sheets/ films, etc. Star Industries Ltd., Thane (“Thane unit”) clears the PVC sheets to independent buyers after undertaking the process of printing, embossing, etc., and on payment of duty on the price approved by the Excise Authorities. The Appellant also cleared the same PVC filaments/ sheets in jumbo rolls without undertaking the activity of printing/embossing, etc., to their sister unit at Daman at a price less by Rs. 3/- per unit sold. After undertaking the process of printing, embossing etc., at the Daman unit, the finished products are cleared after including the cost of printing, embossing, etc., and at the price which is equal to such goods cleared from the Thane unit.
The Department contended that there is no evidence to the effect that the goods cleared to the Daman unit are semi-finished or partially processed and therefore 19 SCNs were issued raising demand of differential Excise Duty, which were later on confirmed by the Adjudicating Authority.
Being aggrieved, the Appellant preferred an appeal before the Hon’ble Commissioner (Appeals) (“First Appeal”), who remanded the matter back to the Adjudicating Authority to be decided afresh (“Remand Order”), as the Appellant contended that differential duty is already included by their Daman unit in the assessable value of PVC sheets cleared and the same should be ascertained from the jurisdictional Range Office of the Daman unit. No appeal was filled by the Department against the Remand Order.
Thereafter, on verification with the jurisdictional in charge of the Daman unit and as per the enquiry report received vide letter dated September 26, 2001, the Adjudicating Authority dropped the Demand raised with the finding that the unit at Daman had discharged differential Excise duty after undertaking the process of printing, embossing etc., and hence there is no undervaluation (“Fresh Order”).
Later, after reviewing the Fresh Order, the Jurisdictional Commissioner preferred an appeal before the lower Appellate Authority, wherein the matter was decided in favour of the Department (“Impugned Order”). Being aggrieved the Appellant preferred an appeal before the Hon’ble CESTAT, Mumbai.
The Hon’ble CESTAT, Mumbai held as under:
Therefore, the Hon’ble Tribunal allowed the appeal in favour of the Appellant and held that the Department cannot raise same grounds in the second ligation when the grounds taken in the first round of litigation were disposed of and no appeal was filed against the Order pertaining to first litigation.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: firstname.lastname@example.org)