Ignoring judicial discipline and recording conclusions diametrically contrary to judgment of the Tribunal is either illustrative of gross incompetence or clear irresponsible conduct – Revenue to pay litigative costs
RGL Converters (the Appellant) is amanufacturer of Printed Cork Tipping Paper (PCT). The relevant process involves procurement of Cork Tipping Base Paper (CKT) including Other Uncoated Paper and Paper Board in rolls or sheets, including jumbo rolls of specified width and length. The jumbo rolls are first trimmed on their edges to remove torn portions and then printed in rotary printing machines with specific designs with the aid of non-toxic, non-poisonous and specially formulated food grade liquid printing ink (purchased from manufacturers of those products). Thereafter, the rolls are slit to the specified, required width.
The Department contended that a new product emerges from the said process, which bears a different name, characteristic and classification i.e. PCT, classifiable under Tariff Heading No.48239014.
Accordingly, Show Cause Notice was issued to the Appellant confirming the duty liability of Rs.24,70,163 /- apart from interest and penalty.
The Appellant submitted to the Adjudicating Authority that in their own case the Hon’ble CESTAT held that the said process does not amount to manufacture so as to be charged to Central Excise duty.However, the Adjudicating Authority rejected the arguments of the Appellant on the basis that the judgment of the Hon’ble CESTAT were challenged before the Hon’ble Delhi High Court and the Hon’ble Delhi High Court had dismissed the Department’s appeal only on the ground of limitation and not on merits. Hence the order of the Hon’ble CESTAT had not attained finality and thus unworthy of efficacy as a binding precedent. The Commissioner (Appeals) also took a similar view and rejected the appeal filed by the Appellant.
Being aggrieved, the Appellant preferred an appeal to the Hon’ble CESTAT, Delhi.
The Hon’ble CESTAT, Delhi held that:
Accordingly, the Hon’ble Tribunal quashed the order of the Adjudicating Authority and the Commissioner (Appeals) and directed the Department to pay the Appellant an amount of Rs. 10,000 within a month.
Further, the Registrar was also directed to communicate a Copy of the Order to the Central Board of Excise and Customs and to the Secretary (Revenue), Ministry of Finance, Government of India, for information.