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Case Law Details

Case Name : Dhampur Sugar Mills Ltd Vs Commissioner of Customs And Central Excise (Allahabad High Court)
Appeal Number : Central Excise Appeal No. 11 of 2022
Date of Judgement/Order : 16/02/2023
Related Assessment Year :

Dhampur Sugar Mills Ltd Vs Commissioner Of Customs And Central Excise (Allahabad High Court)

Allahabad High Court heard learned counsel for parties and having perused the record, prima facie, it cannot be disputed that the issue on which adjudication was sought to be made and the issue that has been adjudicated appear to be different. Insofar as the issue on merits had not been opened in the show cause notice, prima facie case is made out for grant of interim protection.

As to the objection as to further delay that may be caused, the same may be taken care of by providing for expeditious disposal of the appeal itself.

Accordingly, the order dated 29.10.2010 is set aside. The present appeal is disposed of with the observation that the Tribunal shall make best efforts to hear and decide the above appeal within a period of three months. The assessee undertakes to cooperate in the same such that the appeal proceeding may be concluded in a time bound manner. For a period of three months or till the disposal of the appeal, whichever is earlier, coercive measures may remain stayed subject to the disputed amount of CENVAT credit being secured by the appellant by maintaining credit entries of equal amount in the Electronic Credit Ledger under the GST regime, towards satisfaction of the disputed demand.

FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT

Heard Sri Rahul Agarwal learned counsel for the appellant-assessee and Sri Dhananjay Awasthi learned counsel for the Revenue.

Present appeal is directed against the order dated 29.10.2010 passed by the Central Excise and Service Tax Appellate Tribunal on Stay Application No. 324 of 2010 in Central Excise Appeal No. 314 of 2010. The Tribunal has rejected the stay application filed by the assessee against the demand of duty and has granted stay only with respect to demand of interest and penalty.

Present appeal has been pressed on the following questions of law:

a. Whether the Tribunal below, in refusing to even examine that the order in original goes beyond the show cause notice issued to the appellant and is therefore, unsustainable even on a prima facie basis, is legally justified in refusing to grant waiver of pre-deposit of the amount during the pendency of the appeal?

b. Whether the order of the Tribunal below, in misconstruing the effect of the issue slips, panchnama, the certificate of Chartered Engineer etc and in disregarding the same and in rejecting the waiver application filed by the appellant, is wholly unsustainable on the strength of the test laid down by a Division Bench of this Hon’ble Court in ITC Vs. Commissioner (Appeals) 2005 (184) ELT 347?”

In view of the fact that the main appeal is still pending and the arguments advanced are purely legal, present appeal is being disposed of at the fresh stage with the consent of parties.

Submission is, the adjudicating authority could not have travelled beyond the scope of the show cause notice. Vide show cause notices dated 19.10.2007 and 29.4.2008, the assessee was only required to show cause why its claim of CENVAT credit may not be disallowed against the goods (specified in the notice) as they did not fall within the definition of the term ‘Capital Goods’. No allegation was levelled in the show cause notice to disallow such claim on merits that input goods had not been purchased or received or used. However, while passing the adjudication order dated 14.10.2009, the adjudicating authority has fallen in error in rejecting the claim on the basis of utilisation which was not an issue to be adjudicated.

While considering the stay application, the Tribunal has also missed the main issue raised. Occasioned by that error the stay application came to be rejected.

On the other hand, Sri Awasthi would contend, the assessee has enjoyed a stay for very long inasmuch earlier the assessee had filed a writ petition before this Court sitting at Lucknow wherein interim order was granted in the year 2011. Upon that writ petition being rejected for reason of territorial jurisdiction, the petitioner again seeks stay, in this appeal.

Having heard learned counsel for parties and having perused the record, prima facie, it cannot be disputed that the issue on which adjudication was sought to be made and the issue that has been adjudicated appear to be different. Insofar as the issue on merits had not been opened in the show cause notice, prima facie case is made out for grant of interim protection.

As to the objection as to further delay that may be caused, the same may be taken care of by providing for expeditious disposal of the appeal itself.

Accordingly, the order dated 29.10.2010 is set aside. The present appeal is disposed of with the observation that the Tribunal shall make best efforts to hear and decide the above appeal within a period of three months. The assessee undertakes to cooperate in the same such that the appeal proceeding may be concluded in a time bound manner. For a period of three months or till the disposal of the appeal, whichever is earlier, coercive measures may remain stayed subject to the disputed amount of CENVAT credit being secured by the appellant by maintaining credit entries of equal amount in the Electronic Credit Ledger under the GST regime, towards satisfaction of the disputed demand.

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