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Pullman Engineering Co. Pvt. Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Calcutta
Decided On
Reported in(1985)(19)ELT226Tri(Kol.)kata
AppellantPullman Engineering Co. Pvt.
RespondentCollector of Central Excise
Excerpt:
.....had presented an application for reference in the registry on the 15th day of november, 1983. the reference application came up for hearing on the 15th march, 1984. the applicant requires the tribunal to refer certain questions said to be the question of law and arising out of order of the tribunal. in column no. 2 of the reference application, the applicant has mentioned the appeal no. el (t) cal-44/82 in column no. 16, the date of service of a notice of the order under section 35c of the central excises and salt act, 1944 has been mentioned as 21st september, 1983. shri a. k. saha, the learned senior departmental representative has raised a preliminary objection that this reference application is hit by limitation as in column no. 2 of the reference application, the appeal no has.....
Judgment:
1. Pullman Engineering Co. Pvt Ltd 32, Canesh Chandra Avenue, Calcutta-700013 had presented an application for reference in the Registry on the 15th day of November, 1983. The reference application came up for hearing on the 15th March, 1984. The applicant requires the Tribunal to refer certain questions said to be the question of law and arising out of order of the Tribunal. In Column No. 2 of the reference application, the applicant has mentioned the Appeal No. EL (T) CAL-44/82 In Column No. 16, the date of service of a notice of the order under Section 35C of the Central Excises and Salt Act, 1944 has been mentioned as 21st September, 1983. Shri A. K. Saha, the learned Senior Departmental Representative has raised a preliminary objection that this reference application is hit by limitation as in Column No. 2 of the reference application, the appeal no has been" mentioned as Appeal No. EL(T)CAL-44/82 which was passed by the Tribunal vide order dated 5th May, 1983 and was also served on the applicant much earlier and as such the appeal is hit by limitation.

2. Shri P.R. Biswas has appeared on behalf of the application has pleaded that this reference application is against the miscellaneous petition arising out of order in Appeal No. EL(T) CAL-44/82 and the miscellaneous petition was registered in the Registry vide miscellaneous petition 4/83 order dated 7th September, 1983 and this order was served on the applicant on the 21st day of September, 1983 and as such this reference application is within limitation.

3. Shri A.K. Saha, the learned S.D.R. has also opposed that no reference application lies from an order passed by the Tribunal which is a miscellaneous petition.

4. After hearing both the sides, we feel that the contention on the learned S.D R. is not correct, that no reference application lies from an order by this court which is being treated as miscellaneous petition. Reference application is filed under Section 35-G of the Central Excises and Salt Act, 1944. Relevant extract from the same is reproduced as under : "35-G. Statement of case to High Court.-(1) The Collector of Central Excise or the other party may, within sixty days of the date upon which he is served with notice of an order under Sec. 35-C (not being an order relating among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment), by application in the prescribed form, accompanied where the application is made by the other party, by a fee of two hundred rupees require the Appellate Tribunal to refer to the High Court any question of law arising out of such order and subject to the other provisions contained in this section. The Appellate Tribunal shall, within one hundred and twenty days of the receipt of such application, draw up a statement' of the case and refer it to the High Court; Provided that the Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period hereinbefore specified, allow it to be presented within a further period not exceeding thirty days". A perusal of Sec. 35-G shows that the Collector of Central Excise or other party may approach the Tribunal by an application in the prescribed form for preparing a statement to the High Court of any order passed under Section 35C of Central Excises and Salt Act, 1944. Section 35C of the Central Excises and Salt Act, 1944 is reproduced as under:- "35-C. Orders of Appellate Tribunal.-(1) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, often taking additional evidence, if necessary.

(2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under Sub-section (1) and shall make such amendments if the mistake is brought to its notice by the Collector of Central Excise or the other party to the appeal: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the other party, shall not be made under this sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard.

(3) The Appellate Tribunal shall send a copy of every order passed under this section to the Collector of Central Excise and the other party to the appeal.

(4) Save as provided in Sec. 35G or Sec. 35L, orders passed by the Appellate Tribunal on appeal shall be final." The provisions as to the statement of case under the Central Excises and Salt Act, 1944 are exactly similar to the provisions under Sec.

256(1) of the Income-tax Act, 1961 and 254 of the Income-tax Act, 1961.

The relevant portions of the said sections under the Income-tax Act, 1961 are reproduced as under :- "256(1). The assessee or the Commissioner may, within sixty days of the date upon which he is served with notice of an order under Section 254, by application in the prescribed form, accompanied where the application is made by the assessee by a fee of one hundred and twenty-five rupees, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order and, subject to the other provisions contained in this section, the Appellate Tribunal shall, within one hundred and twenty days of the receipt of such application, draw up a statement of the case and refer it to the High Court : Provided that the Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period hereinbefore specified, allow it to be presented within a further period not exceeding thirty days." "254. (1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.

(2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under Sub-section (1) and shall make such amendment in the mistake is brought to its notice by the assessee or the Income-tax Officer: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard.

(3) The Appellate Tribunal shall send a copy of any orders passed under this Section to the assessee and to the Commissioner.

(4) Save as provided in Section 256. orders passed by the Appellate Tribunal on appeal shall be final." Before coming into existence of the Income-tax Act, 1961, the earlier act was Income-tax Act, " 1922. A reference from an order passed by the Appellate Tribunal could be filed only in respect of an order passed under Section 33(4) of the Income-tax Act, 1922. Relevant portion of Section 66 and Section 33(4) and (5) are reproduced as under :- "66. Statement of case by Appellate Tribunal to High Court.-(1) Within sixty days of the date upon which he is served with notice of an order under Sub-section (4) of Section 33 the assessee or the Commissioner may, by application in the prescribed form, accompanied where application is made by the assessee by a fee of one hundred rupees, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order, and the Appellate Tribunal shall within ninety days of the receipt of such application draw up a statement of the case and refer it to the High Court: Provided that, if, in the exercise of its powers under Sub-section (2), the Appellate Tribunal refuses to state a case which it has been required by the assessee to state, the assessee may, within thirty days from the date on which he receives notice of the refusal to state the case, withdraw his application and, if he does so, the fee paid shall be refunded." "Section 33(4). The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and shall communicate any such orders to the assessee and to the Commissioner.

33(5). Whereas the result of an appeal any change is made in the assessment of a firm or association of persons or a new assessment of a firm or association of persons is ordered to be made, the Appellate Tribunal may authorise the Income-tax Officer to amend accordingly any assessment made on any partner of the firm or any member of the association." A comparative study of Sections 35-C and 35-G of the Central Excises and Salt Act, 1944, Sections 256 (1) and 254 of the Income-tax Act, 1961 and Section 66 and Section 33 (4) and (5) of the Income-tax Act, 1922 clearly shows that under the Income Tax Act, 1922 no reference application could lie from a miscellaneous order passed under 1922 Act whereas a reference application lies from miscellaneous order passed under Section 254 of the Income-tax Act, 1961 and Sec. 35C of the Central Excises and Salt Act, 1944. Keeping in view the above provisions, we hold that a reference application lies to the Tribunal from an order of the Tribunal rectifying or denying rectification from its own appellate order. In the instant case, Shri Biswas, the learned consultant has conceded that there was a clerical error in not typing the miscellaneous application no. in Column No. 2 of the reference application. But the date of service in Column 6 clearly indicates that the applicant has come in reference against the order passed by this Tribunal in miscellaneous application No. 4/83. In this respect accepting argument of the learned authorised representative on behalf of the appellant we hold that this reference application is in respect of miscellaneous Order No. 341/CAL/83-2056, dated 7th September, 1983.

In as much as in our opinion, no question of law does arise out of the aforesaid order of the Tribunal, we decline to draw a statement of the case and proceed to state the reasons therefore.

5. The applicant is a public limited company and a manufacturer of engineering goods falling under Item No. 68 of the Central Excise Tariff Schedule. A show cause notice dated 18th May, 1982 was issued to the applicant by the Collector of Central Excise, Calcutta alleging that the applicant removed surreptitiously during the years 1977 and 1979 engineering goods valued at Rs. 5,61,642.00 falling under item 68 being a difference between the value of the clearances of the said goods shown in the audited balance sheets. of the applicant for the years 1977 and 1979 and the clearances of the said goods as incorporated in the statutory Central Excise records without payment of Central Excise duty leviable thereon and without proper documentation.

The applicant was alleged to have contravened certain provisions of the Central Excise Rules as mentioned in the said show cause notice and asked to show cause why the Central Excise duty amounting to Rs. 26,076.90 should not be demanded on the said goods under Rule 9 (2) read with Rule 9A (5) of the Central Excises Rules 1944, and why penalty should not be imposed on the applicant under Rule 173-Q. In reply to the said show cause notice, the applicant company had denied each and every allegation made in the aforesaid show cause notice vide their letter dated 17th June, 1982 and had stated that the difference in the figures between balance sheet and R.G. account for the year 1977 in respect of 2 nos. winches manufactured and gold by them had already been adjudicated by the department vide order-in-original No.CPO/Collr/18/82 dt. 13-5-82. With regard to R.G. 1 for the year 1979 in respect of Grab and Derricks, it was stated that the Plugging Box is also a type of Grab and Plugging Box was taken into account under the balance sheet and this was accounted in the R.G.I under the head miscellaneous. It is also stated that the applicant company removed 4 Nos. of Derricks during the year 1979 which was purchased by them from applicant's sister concern M/s. Construction Machinery Corporation and these were wrongly shown in the balance sheet as manufactured by them during 1979 under the description of "derricks" as the applicant was not capable of manufacturing crawler cranes. Derricks is only a part of crawler crane. The learned Collector did not accept the contention of the applicant and by an order dt. 29th September, 1982 had demanded a duty amounting to Rs. 19,792/-one number of Grab and four number of Haulages and Capstan and Derricks valued together at Rs. 2,47,401/-.

The learned Collector had also imposed a penalty of Rs. 20,000/-under Section 173-Q of the Central Excises Rules, 1944 on the applicant company for the contravention of various provisions of said rules in addition to the demand of duty at Rs. 19,792.08. Being aggrieved from the aforesaid order, the applicant had filed an appeal before the Tribunal. The Tribunal had confirmed the order passed by the learned Collector vide its order dt. 5th May, 1983. Thereafter, the applicant had presented a miscellaneous application in the Registry on the 2nd June, 1983. In the miscellaneous application, the applicant had alleged that there was a mistake on record in the order dated 5th May, 1983 as the Tribunal had relied upon the applicant's audited balance sheet for the year 1979 which apparently on the face of it was incorrect and faulty and not reliable at all. The applicant had further contended that the balance sheet being not reliable, the order dt.. 29th September, 1982 passed by the learned Collector, was based on no evidence and was perverse, illegal and void and had requested the Tribunal for the acceptance of the miscellaneous application. The said miscellaneous application was dismissed by the Tribunal vide its order dated 7th day of September, 1983. Being aggrieved from the aforesaid miscellaneous application, the applicant has come into a reference application and has suggested the following questions of law.

"1. Whether in the facts and circumstances of the case, the Customs Excise and Gold Control Appellate Tribunal, Calcutta Bench, has correctly held that "In respect of a debatable point of law or acceptance of evidence it cannot be said that the decision is a mistake apparent from record." 2. Whether in the facts and circumstances of the case, the Appellate Tribunal has committed a mistake apparent from record in confirming the Collector's order appealed from on the basis of the Applicant's Balance Sheet for the year 1979 even though the said Balance Sheet was not prepared correctly as it did not record sales of the 4 crawler cranes and 1 plugging box made by the applicant in the year 1979 which is apparent from records of the case, namely the said Balance Sheet and Sales invoices.

3. Whether in the facts and circumstances of the case Rule 9A(5) of the Central Excise Rules was correctly applied." 6. Shri P.R. Biswas, the learned consultant has appeared on behalf of the applicant and has relied on the statement of facts stated in his reference application and has stated that the balance sheet in fact represents the value of the transferred goods and these were not manufactured by the applicant company. He has referred to a judgment of the Hon'ble Supreme Court in the case of Commissioner of Income-tax, West Bengal, Appellants v. Anwar Ali reported in AIR 1970, 1782 wherein the Hon'ble Court had held that the proceedings under section of the Income-tax Act are of a penal nature and the burden is on the department to prove that the receipt of the amount in dispute constitutes the income of assessee. The mere fact that the explanation given by the assessee in respect of such amount is false does not necessarily give rise to the inference that the disputed amount represents his income. The finding given in the assessment proceedings that the particular receipt was income is not conclusive but is good evidence. Before penalty can be imposed the entirety of circumstances must reasonably point to the conclusion test the disputed amount represented income and that the assessee had consciously concealed the particulars or had deliberately furnished inaccurate particulars. Shri Biswas, learned consultant has pleaded that in view of this Hon'ble Supreme Court judgment, the mere fact that the applicant's explanation on the items was not accepted is not sufficient enough to justify the findings of the learned Collector as well as of the Tribunal. He has pleaded that a question of law is involved and it is a fit case that the same should be referred to the High Court.

7. In reply Shri A.K. Saha, learned S.D.R. has pleaded that it is a finding of fact arrived by this Court as well as the learned Collector and no question of law is involved. There is no correlation with R.G. 1 and balance sheet and the applicant has not been able to reconcile the same. He has pleaded that the reference application should be dismissed.

8. After hearing both the sides, we hold that the Tribunal had arrived at a conclusion after going through the facts of the case, the judgment cited by the authorised representative does not help the applicant. In the said judgment, the explanation of the appellant was not accepted in respect of cash credits given by the assessee and the penalty was based on the findings of the assessment proceedings. But in the instant case, the Court had given finding or fact on the basis of the balance sheet filed by the applicant. This court had rightly held while disposing of the miscellaneous application that in respect of a debatable point of law or acceptance of evidence, it cannot be said that this is a mistake apparent from record. It is so held by the Hon'ble Supreme Court in the case of Balaram v. Volkart Bros, reported in 82 ITR 50 that a decision on a debatable point of law or failure to apply the law to a set of facts which remain to be investigated, cannot be corrected by way of rectification. (Not cited by the parties). During the course of arguments, we had fought this judgment to the notice of the learned authorised representative Shri P.R. Biswas as well as the learned S.D.R. Shri A.K. Saha.

The Tribunal after considering the facts and materials and the legal pronouncement observed that the finding of the Tribunal is a finding of fact and no question of law does arise out of aforesaid order of the Tribunal. In the result, the reference application is rejected.

9. The respondent has filed cross-objection to the reference application dated 21st December, 1983, the same was presented in the Registry on the 21st December, 1983. The cross-reference application filed by the revenue is barred by time and the learned S.D.R. has not been able to justify his claim for confirmation of delay. The cross-reference application being hit by limitation is dismissed.


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