Allowed

Vamatex India Ltd./, v. the Commissioner of Central Excise, Mumbai - I

Bombay HC2 Jul 2012CEXA/95/2012

Case brief

AI extract

What is this about?

The Bombay High Court allowed two Central Excise Appeals challenging orders of the CESTAT that directed appellants to deposit a part of the confirmed duty before restoration for fresh adjudication. The court quashed the requirement due to inconsistent Tribunal reasoning.

What did the court decide?

Impugned orders directing pre-deposit of duty were quashed; adjudicating authority directed to pass fresh adjudication order without requiring any pre-deposit.

Vamatex India Ltd./, Vs the Commissioner of Central… — Customs and Excise | Bombay HC (2012)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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CENTRAL EXCISE APPEAL (L) NO. 41 OF 2012

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Vamatex India Ltd. .. Appellants

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v/s.

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The Commissioner of Central Excise, Mumbai-I ..Respondent

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WITH CENTRAL EXCISE APPEAL NO. 68 OF 2012

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Jhawar Biotech Pvt. Ltd. .. Appellants

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v/s.

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The Commissioner of Central Excise, Mumbai-I ..Respondent

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Mr. Prakash Shah with Jas Sanghavi i/b PDS Legal for the appellants Mr. Pradeep Jetly i/b Mr. J.B. Mishra for the respondent

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CORAM : J.P. DEVADHAR & R.Y.GANOO, JJ. DATED : 2^nd JULY, 2012.

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P.C. :

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Whether the CESTAT while allowing the appeals and restoring the

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matter for fresh adjudication was justified in directing the appellants to deposit a part of the duty confirmed by the orders in original, is the question raised in these two appeals.

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The appeals are admitted on the above question and taken up for hearing by consent of both the parties.

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The relevant facts are that both the appellants claim to have received duty paid grey fabrics as inputs and used the same in the manufacture of processed fabrics which was ultimately exported. The appellants took credit of the duty paid on grey fabrics on the basis of the invoices issued by various parties. By show cause notices, the appellants were called upon to show cause as to why the credit taken on the basis of the invoices issued by some of the firms, who had supplied grey fabrics should not be disallowed on the ground that the said firms were fake or non-existent firms. The appellants opposed the show cause notice.

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By order in original, the Commissioner disallowed the credit to the extent specified therein and confirmed the duty demand to the extent the credit was disallowed with interest and penalty. On appeal, the Tribunal by the impugned order directed the appellants to deposit part of the demand confirmed by the adjudicating

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authority. Challenging the aforesaid order, the appellants have filed the above two appeals.

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The reasons given by the Tribunal for directing pre-deposit are mutually contradictory. In paragraph 12 of its order, the Tribunal has recorded that since the appellants had failed to produce evidence relating to the existence of the firms who had supplied grey fabrics, the appellants must be directed to deposit a part of the duty confirmed by the order in original. However, in paragraph 13 of its order, the Tribunal has recorded that since the appellants had no opportunity of pleading their case before the adjudicating authority the ex-parte orders in original are liable to be set aside. Therefore, in the facts of the present case, where the Tribunal was prima-facie satisfied that the appellants had no opportunity to putforth their case and accordingly set aside the demand, ought not to have directed the appellants to deposit a part of the demands confirmed under the orders in original, which are set aside by the very same order.

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In this view of the matter, the impugned orders passed by the

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Tribunal directing the appellants to deposit part of the demand confirmed is quashed and set aside and the adjudicating authority is directed to hear and pass fresh adjudication order on merits without insisting any pre deposit.

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Both the appeals are allowed in the above terms, with no order as to

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costs.

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[R.Y.GANOO, J.]

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[J.P. DEVADHAR, J.]

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U.S.Jagtap

Vamatex India Ltd./, v. the Commissioner of Central Excise, Mumbai - I

Case brief

What is this about?

What did the court decide?

Vamatex India Ltd./, v. the Commissioner of Central Excise, Mumbai - I

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

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