Commissioner of Central Excise vs the on 13 February, 2013

7/29/2019 Commissioner of Central Excise vs the on 13 February, 2013

1/4

Gujarat High Court

Gujarat High Court

Commissioner Of Central Excise vs The on 13 February, 2013

Bench: Akil Kureshi Gokani, Sonia Gokani

COMMISSIONER OF CENTRAL EXCISE....Appellant(s)V/SGIRISH B MISHRA....Opponent(s)

O/TAXAP/951/2012

ORDER

IN

THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 951 of

2012

================================================================ COMMISSIONER

OF CENTRAL EXCISE....Appellant(s)

Versus

GIRISH B

MISHRA....Opponent(s)

================================================================ Appearance:

MS

M A N I S H A L A V K U M A R , A D V O C A T E f o r t h e A p p e l l a n t ( s ) N o . 1

================================================================ CORAM:

HONOURABLE

MR.JUSTICE AKIL KURESHI and

HONOURABLE MS

JUSTICE SONIA GOKANI

Date : 13/02/2013

ORAL ORDER

(PER : HONOURABLE


Indian Kanoon - http://indiankanoon.org/doc/23215026/ 1


2/4

MR.JUSTICE AKIL KURESHI)

1. The

Department has challenged the judgment of Customs, Excise and Service Tax Appellate Tribunal, dated

15.05.2012 raising following questions for consideration:-

(A)

Whether the Honble Customs, Excise and Service Tax Appellate Tribunal (CESTAT), West Zonal Bench,

Ahmedabad, in order No.A/748/WZB/AHD/2012 dated 15.05.2012, is right in deciding/entertaining an appeal

against an order passed under Section 9A of the Central Excise Act,1944, by the Chief Commissioner, where

there is no provision under Section 35B of the Central Excise Act, 1944 to appeal against the order passed by

the Chief Commissioner under Section 9A(2) of the Act read with Central Excise (Compounding of Offences)

Rules, 2005? (B)

Whether the order passed by the Chief Commissioner in the case of Compounding of Offence under Section

9A of the Central Excise Act, 1944 can be treated as adjudication order passed under Section 35A of the

Central Excise Act, 1944? Whether

the Honble Customs, Excise and Service Tax Appellate Tribunal (CESTAT), West Zonal Bench, Ahmedabad,

in Order No.A/748/WZB/AHD/2012 dated 15.05.2012, is right in treating the order passed by the Chief

Commissioner under Section 9A of the Central Excise Act, 1944 at par with the order passed under Section 35

by the Board which are appealed before the Tribunal? Briefly

such issue arises in following back-ground:- The

respondent-assesse was engaged in manufacture of sanitary wares. A search was carried out at the premises of

the respondent, leading to issuance of show-cause notices including for personal penalty on Shri.G.B.Mishra.

Shri.G.B.Mishra, applied on 19.11.2009 to the Commissioner of Central Excise for compounding the offence.The

Chief Commissioner, Central Excise, Ahmedabad, however, by his order dated 29.03.2010, rejected such an

application for compounding on various grounds. Aggrieved by such order, Shri.G.B.Mishra appealed before

the Tribunal under Section 35B of the Central Excise Act. Such appeal came to be partly allowed. The

departments stand that the appeal would not be maintainable was rejected. On the merits of the order passed

by the Commissioner, Tribunal made certain observations and ultimately remanded the proceedings before the

Commissioner for passing a fresh order, after giving reasonable opportunity to Shri.G.B.Mishra. This, the

order of the Tribunal is challenged by the Department in the present appeal.

3. Counsel

Ms.M.L.Shah, submitted that the appeal before the Tribunal was not maintainable in terms of Section 35B of

the Central Excise Act. She submitted that order passed by the Commissioner was merely an administrative

order and cannot be seen as an order passed by the adjudicating authority under the Act. She further submitted

that even on merits, the Commissioner had given proper reasons for not accepting the request of the

respondent for compounding the offence.

4. Section

9A of the Central Excise Act,1944, pertains to compounding of certain offences, which are non-cognizable.

Sub-section (2) thereof pertains to compounding of such offences and empowers the Chief Commissioner of




3/4

the Central Excise to permit compounding under specified circumstances. Sub-section (2) of Section 9A reads

as under:-

Any

offence under this Chapter may, either before or after the institution of prosecution, be compounded by the

Chief Commissioner of Central Excise on payment, by the person accused of the offence to be Central

Government, of such compounding amount as may be prescribed.

In

exercise of powers under Section 37 of the Central Excise Act,1944, read with Section 9A(2) thereof, the

Central Excise (Compounding of Offences) Rules, 2005, have been framed. Rule 3 thereof pertains to form

and manner of application. Rule 4 thereof pertains to procedure on receipt of application under rule-3 and

proviso thereto interalia states that on receipt of an application under rule-3, the compounding authority shall

call for a report from the reporting authority with reference to the particulars furnished in the application, or

any other information, which may be considered relevant for examination of such application. Sub- rule (3) of

Rule-4 provides that the compounding authority, after taking into account the contents of the said application,

may pass an order, either allowing the application indicating the compounding amount and grant immunityfrom prosecution or reject such an application. Under sub-rule (5) of Rule 4, the applicant gets 30 days of time

from the date of receipt of order under Sub-rule (3) to deposit the compounding amount. Rule 5 provides for

fixation of compounding amount. Rule 6 pertains to power of compounding authority to grant immunity from

prosecution. Rule 7 provides for withdrawal of immunity from prosecution, when it is found that the applicant

failed to pay any sum specified in the order of compounding within the time specified in the order, or failed to

comply with any other conditions subject to which the immunity was granted. Sub-rule (2) of Rule 7 further

provides that

an immunity granted to a person may, at any time, be withdrawn by the compounding authority, if he is

satisfied that such person had, in the course of compounding proceedings, concealed any particulars, which

were material, or had given false evidence. Section

35B of the Central Excise Act, 1944, pertains to appeals to the Appellate Tribunal. Sub-section (1) thereof

permits any person aggrieved by any of the orders, specified in Clauses (a) to (d) thereof, to appeal to the

Appellate Tribunal against such an order. Section 35B(1) which is relevant for our purpose reads as under:-

Section

35B. Appeals to the Appellate Tribunal:-(1) Any person aggrieved by any of the following order may appeal

to the Appellate Tribunal against such order:-

(a)

a decision or order passed by the (Commissioner of Central Excise) as an adjudicating authority; (b)

an order passed by the (Commissioner (Appeals) under Section 35A; (c)

an order passed by the Central Board of Excise and Customs constituted under the Central Board of Revenue

Act, 1963 (54 of 1963) (hereafter in this Chapter referred to as the Board) or the Appellate (Commissioner of

Central Excise) under Section 35, as it stood immediately before the appointed day; an

order passed by the Board or the (Commissioner of Central Excise), either before or after the appointed day,

under Section 35A, as it stood immediately that day; Clause-a




4/4

of sub-section (1) of Section 35B thus permits person aggrieved to file an appeal before the Appellate

Tribunal against the decision and order passed by the Commissioner of Central Excise as an adjudicating

authority. The

Adjudicating Authority has been defined in Section 2(a) of the Central Excise Act, 1944 as under:- (a)

Adjudicating authority means any authority competent to pass any order or decision under this Act, but does

not include the Central Board of Excise and Customs constituted under the Central Board of Revenue Act,1963 (54 0f 1963), (Commissioner of Central (Appeals)) or Appellate Tribunal; Question

for consideration before us is whether the order passed by the Commissioner rejecting the application of the

respondent for compounding the offence can be stated to be the one passed by the adjudicating authority, as

defined under Section 2(a) of the Act. If we analyse the said provision, it defines the term Adjudicating

Authority to mean any authority, competent to pass any order or decision under the Act. The question,

therefore, arises whether the order rejecting the application for compounding was one passed by the

Commissioner under the Central Excise Act, 1944. In this respect, we have noticed statutory scheme

pertaining to the procedure for compounding the offence. The power of compounding flows from Section

9A(2) of the Act. The procedure is laid down under the Central Excise (Compounding of Offences) Rules,

2005. Under such rules, the compounding authority has a discretion to grant or not to grant, compoundingupon

such conditions that may be imposed by him. It is thus, clear that the compounding authority exercises its

discretionary power and decides an application filed by the appellant for compounding the offence. By no

stretch of imagination, it can be stated that any such order either allowing or rejecting the application for

compounding is not an order passed by the Commissioner as adjudicating authority as defined under Section

2(a) of the Act. Any such order would certainly be an order passed under the Act. The words any order or

decision under the Act used in Section 2(a) of the Central Excise Act, 1944, defining the term, Adjudicating

authority, must take in its fold an order deciding the li s of a party and would not include merely an

administrative order. In the present case, however, the Commissioners order does decide the question of

compoundability of an offence of the applicant concerned and would therefore, in our view, satisfy thedescription of any order or decision passed by him under this Act. In that view of the matter, appeal against

any such order would lie before the Tribunal in terms of Clause (a) of sub-section (1) of Section 35B of the

Central Excise Act. The Tribunal thus, was justified in entertaining such an appeal. With regard to merits of

the issue, the Tribunal has merely remanded the proceedings before the Commissioner for fresh consideration

and decision in accordance with law, after giving opportunity of hearing to the respondent.

In

the facts and circumstances of the case, no interference is called for. The Tax Appeal is thus, dismissed.

(AKIL KURESHI, J.)

(MS SONIA GOKANI, J.)

Girish

Page

8

of 8



Documents

Commissioner of Central Excise vs the on 13 February, 2013