Mr. N. Paul Vasanthakumar, C.J. - Both the appeals are preferred by the Commissioner of Customs and Central Excise against the very same
respondent i.e. M/s Suvi Cement Industries Private Limited.
2. CEREF No. 13/2008 is preferred by the Commissioner of Customs and Central Excise challenging the order of the Customs, Excise and
Service Tax Appellate Tribunal Circuit Bench at Srinagar in Excise Appeal No. 1541 of 2006, dated 14.06.2007. The appeal was admitted on
the following substantial questions of law:
1. Whether the exemption in excise duty under Notification No. 56/2002-CE, dated 14.11.2002 read with Circular No. 682/73/2002-CX, dated
19.12.2002 can be claimed by a Unit which starts commercial production on or after 14.06.2002 regardless of date of its setting up ?
2. Whether the Tribunal could have admitted Corrigendum dated 06.05.2006 in evidence at appellate stage and relied upon it while granting
exemption to the Unit?
3. The case of the appellant before the Commissioner (Appeals) was that the respondent was not eligible for exemption from Central Excise Duty
under Notification No. 56/2002-CE, dated 14.11.2002 by virtue of the Notification stating that new industrial units which have commenced their
production on or after 14th day of June, 2002 and the said condition was not satisfied. The reliance was placed on the certificate of permanent
registration dated 06.03.2002.
4. According to the respondent, commercial production was started only on 15.06.2002, therefore, it was eligible to get benefit of exemption
under the said notification. Though the registration certificate mentioned the production date as 10.02.2002, however, physical power connection
of 150 H.P. load was issued on 06.05.2002 and thereafter only the commercial production could be started from 15.06.2002. The said certificate
was accepted and the earlier permission granted was treated as ad hoc permission and the approval of the Director Industries and Commerce was
received by the District Industries Centre, on 10.06.2002. Hence, a finding was recorded that the respondent had started commercial production
only from 15.06.2002 and not from 10.02.2002.
5. The contention of the appellant is that the permission having been obtained to manufacture cement on 10.02.2002, the concession is not
available.
6. The factual aspect as to whether the commercial production was started from 10.02.2002, as claimed by the appellant or from 15.06.2002, as
claimed by the respondent, has to be determined based on evidence. The said aspect has not been considered by the CESTAT and the finding
recorded is that the registration certificate dated 06.03.2002 showing the date of commencement of production as 10.02.2002 appears to be only
an ad hoc permission for a period of 60 days and the said finding rendered without recording a clear cut finding, cannot be sustained and on the
said ground alone the order of the CESTAT is set aside and the matter is remanded to the Customs, Excise and Service Tax Appellate Tribunal
Circuit Bench at Srinagar for considering the above aspect and passing fresh orders in accordance with law within a period of eight weeks.
7. Brief facts which led to the filing of CEREF No. 14/2008 are that respondent M/s Suvi Cement Industries Pvt. Ltd. is registered with Central
Excise for the manufacture of cement falling under Chapter 25 of the Central Excise Tariff Act, 1985. Notification No. 56/2002-C.E., dated
14.11.2002 provides for exemption to the new units as well as existing units with some conditions, located in area specified in Annexure-II from
duty of excise as is equivalent to the amount of duty paid by the manufacturer of goods other than the amount of duty paid by utilization of cenvat
credit. The exemption shall apply only to the new units which have commenced their commercial production on or before the 14th day of June,
2002 and to the units existing before the 14th day of June, 2002 but have undertaken substantial expansion by way of increase in installed capacity
by not less than twenty five percent on or after 14.06.2002 or made new investments on or after 14.06.2002 and such new investment is
attributable to the generation of additional regular employment of not less than twenty five percent.
8. The respondent had filed a refund claim of Rs. 1,55,398/- for the month of March, 2004 in terms of Notification dated 14.11.2002 and the
Adjudicating authority by order dated 27.01.2006 rejected the refund claim by stating that the earlier refund claims of the unit have already been
rejected as unit was found not to qualify as a new unit in term of notification dated 14.11.2002. Against the order dated 27.01.2006 respondent
filed appeal before the Commissioner (Appeal), who set aside the order of the adjudicating authority on the ground that respondent had produced
a corrigendum dated 06.05.2006 to the certificate dated 06.01.2003 issued by the GM, DIC, Kathua on the basis of which it was found that the
respondent did not qualify for benefit as a new unit in terms of Notification No. 56/2002 and remanded back the matter to the original adjudicating
authority to examine the whole issue minutely.
9. As against the remand order passed by Commissioner (Appeals) to examine the corrigendum dated 06.05.2006 appeal was filed before the
CESTAT which dismissed the appeal relying on the decision of High Court of Gujarat in the case of CCE, Ahmedabad v. Medico Labs
reported as 2004(173) ELT 117 (Guj).
10. It is the contention of the appellant that a different view was taken by the Punjab and Haryana High Court. Hence the substantial question of
law was framed, which reads thus:-
Whether after a conscious interference by the legislature to do away with the power of remand by the Commissioner(Appeals) vide amendment to
Section 35-A of the Central Excise Act, 1944 w.e.f. 11.05.2001 under the Finance Bill, 2001 and after removal of the words 'or may refer the
case back to the adjudicating authority with such directions as he may think fit for a fresh adjudication or decision' from Section 35-A of the
Central Excise Act, 1944, the Commissioner (Appeals) has any power to remand back a case to the adjudicating authority?.
11. The said question having been answered by the CESTAT in its order by stating that the Commissioner (Appeals) is vested with the power
while deciding the appeal as he deems fit by confirming, modifying or annulling the order, the power of remand is available even after amendment
of Section 35-A of Central Excise Act. The Gujrat High Court in the decision rendered in Tax Appeal Nos. 199 with 200 of 2004 dated
21.09.2004 held that:-
14. We must also state that even after amendment, which has come into force with effect from 11.05.2001, powers of remand by allowing the
appeal of the Commissioner(Appeals) have not been taken away specifically. In that view of the matter, we are of the considered opinion that the
appellate authority viz. Commissioner(Appeals) was vested with the power while deciding the appeal as he deemed fit by confirming, modifying or
annulling the decision or order appealed against him. In our considered opinion, order of remand necessarily annuls the decision, which is under
appeal before the appellate authority. Therefore, we entirely agree with the view taken by the learned Single Member of the Tribunal that even
after amendment of Section 35-A or the Central Excise Act, the appellate authority has the power to set aside the decision, which is under appeal
before it and it has power to remand the matter to the authority below for its fresh consideration.
12. The Punjab and Haryana High Court in CUSAP No. 20/2006, dated 08.03.2007 took a different view and held thus:-
Once the power of remand has been expressly taken away by the Finance Act, 2001, which came into operation w.e.f. 11.5.2001, the
Commissioner (Appeals) is divested of power to remand the case back to the Adjudicating Authority. It cannot be argued that the power of
remand should still be read into the provision which survive after deleting the words 'or may refer the case back to the adjudicating authority with
such directions as he may think fit for fresh adjudication or decision'. There is expression of necessary intendment in deletion of the aforementioned
expression by the Legislature. In that regard we place reliance on the judgment at Hon'ble the Supreme Court in the case of Hitendra Vishnu
Thakur v. State of Maharashtra, (1994) 4 SCC 602; Maharaja Chintamani Saran nath Shahdeo v. State of Bihar, (1999) 8 SCC 16
and Garikepadi Veeraya v. Subbiah Choudhry, AIR 1957 SC 540.
In view of the above, the impugned orders dated 25.11.2004 (A-2 and A-3), passed by the Commissioner (Appeals) as well as the order dated
23.1.2006 (A-l) passed by the Tribunal, are set aside. The matter is sent back to the Commissioner (Appeals) for decision in accordance with law
13. The said decision was not considered by the CESTAT. Hence we set aside the order and remand the matter to the CESTAT to decide the
appeal afresh.
14. Both the matters are remanded back.
