Reliance on decision which is set aside by Tribunal

PJ/Case Laws/2011-12/1519

Case: COMMISSIONER OF C. EX., ALLAHABAD Versus HINDALCO INDUSTRIES LTD

Citation: 2011 (272) E.L.T. 278 (Tri. - Del.)

Issue:- When earlier decision relied upon by Adjudicating Authority set aside, then it will not be helpful in subsequent cases.

Composite penalty u/s 11AC and Rule 15(1) and (2) cannot be imposed where there is no specific provision in SCN.

Brief Facts:- During the course of investigation the Cenvat credit goods were found short on physical verification. Accordingly, a show cause notice was issued for demand of duty on short found inputs and proposal for penalty under Section 11AC read with Rule 13, 15 of Central Excise [(sic) Cenvat Credit) Rules, 2002/2004. Thereafter the original adjudicating authority confirmed the demand along with interest and penalty under Section 11AC. On appeal, by both the sides, the Commissioner (Appeals) rejected the appeal of the assessee but he has further imposed penalty under Rule 15(2) of Cenvat Credit Rules apart from the penalty under Section 11AC of Central Excise Act, 1944.

Aggrieved from the said order, both sides are again in appeal before this Tribunal, Revenue is on the ground that that further penalty under Rule 15(1) of Central Excise [Cenvat Credit] Rules, 2004 is to be imposed and the assessee is against the demand, interest and penalties.

Appellant’s Contention:- Revenue submitted that the penalties under Section 11AC of the Central Excise Act, 1944 can be imposed separately and penalties under various provisions of Rule 15 of Cenvat Credit Rules, 2004 can be imposed separately under various clauses of the contraventions made by the assessee in this case. With regards to the merits of the case, he submitted that the facts of this case are not identical to the earlier case and hence, the decision cannot be relied upon.

Respondent’s Contention:- Assessee submits that the adjudicating authority has confirmed the demand relying on the decision in the assessee own case. The said order of the adjudicating authority has been set aside by the Tribunal. Hence, the impugned orders are liable to be set aside.

Assessee also submitted that as there is proposal of penalty under Section 11AC of Central Excise Rules, 1944 read with Rule 13, 15 of Cenvat Credit Rules, 2002/2004 in the show cause notice, no separate penalties under various provisions is imposable on the assessee.

Reasoning of Judgment:- It is fairly agreed by both the sides that adjudicating authority had relied upon the earlier decision of the Commissioner (Appeals) in the appellant’s own case which have been set aside by the Tribunal. It is not denied by the revenue that he has not relied upon the said decision.

The contention of the revenue that the earlier decision of the Commissioner (Appeals) cannot be relied upon in the facts of this case also supports the contention of the assessee. Hence, when this Tribunal has set aside the decision on which the adjudicating authority has relied upon, that decision will be of no help in this case also hence, the same is to be set aside.

But in the interest of justice, the matter is to be adjudicated afresh by the adjudicating authority as he had relied upon certain decision which has been set aside by this Tribunal. In that case, the matter needs fresh examination and hence the matter is sent back to the original authority to decide the matter afresh keeping all the issues open after giving reasonable opportunity of hearing to the appellants to defend their case.

There is no specific provision under which the Department wants to impose penalty under Rule 15. There is no proposal for separate penalties in the show cause notice, no specific allegation for specific penalty has been made. Hence the penalties under Rule 15 are not imposable on the assessee and there is proposal for imposing penalty under Section 11AC of the Central Excise Act read with Rule 15 of the Cenvat Credit Rules, 2002/2004.

Decision:- Revenue’s appeal rejected by way of remanded.

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PJ/Case Laws/2011-12/1519

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