JACS METALS PRIVATE LTD. AND CHAKS Vs. CCE

JUDGEMENT

(1.) IN Order -in -Original No. 39/96 dt. 14.3.96, the Commissioner of Central Excise had confirmed demand of duty of Rs. 45,42,232/ - against M/s. Jacs Metals Private Ltd. [JMPL, for short] (appellants in appeal Nos. 700 and 722/96) in respect of Aluminium sheets and circles found to have been manufactured by them and cleared without payment of duty during the period 1.3.94 to 17.1.95. The above demand of duty was quantified on the basis of the assessable value which was determined by the Commissioner without allowing deduction of Excise Duty from invoice price of the goods under Section 4(4) (d) (ii) of the Central Excise Act. The Commissioner, however, held that M/s. JMPL were eligible for Modvat credit of the duty paid on the inputs used in the manufacture of the said final products. Quantification of this credit was left to be done by the divisional Asst. Commissioner in accordance with the relevant Rules. In the above order, learned Commissioner also confiscated certain quantities of Aluminium circles and vessels under Rule 173Q of the Central Excise Rules, 1944, but M/s. JMPL were given an option to redeem the goods on payment of a fine of Rs. 25,000/ - in lieu of confiscation. A penalty of Rs. 5 lakhs was imposed on the party under Rulesl73Q and 226 of the Central Excise Rules, 1944. A separate penalty of Rs. 25,000/ - was imposed on M/s. Chaks Vessels Private Ltd. (CVPL, for short) [appellants in appeal No. E/701/96] under Rule 209A. M/s. JMPL filed appeal Nos. 700 and 722/96 challenging the Commissioner's order on the grounds (a) that the price charged by them was a cum -duty price and hence Excise duty should have been deducted from the price under Section 4(4)(d) (ii) for arriving at the assessable value; (b) that the Commissioner himself should have quantified the admissible Modvat credit and should not have directed the Asst. Commissioner to do the job; (c) that, if the benefit of Modvat credit and that of Section 4(4)(d) (ii) had been allowed, the quantum of duty recoverable would have been far below the amount of duty demanded by the Commissioner and (d) that, on the facts and circumstances of the case, penalty of Rs. 5 lakhs was very heavy vis -a -vis the amount of duty if so quantified. M/s. CVPL filed appeal No. 701/96 against the penalty imposed on them by the Commissioner, contending mainly that Rule 209A was not applicable to them on the facts of the case. Subsequently, the divisional Asst. Commissioner quantified the admissible Modvat credit in his order dated 17.9.96. Against his order, M/s. JMPL filed an appeal with the Commissioner (Appeals) and that appeal is still pending. The department also filed an appeal with the Commissioner (Appeals) challenging the grant of Modvat credit to M/s. JMPL by the AC and that appeal also is pending. The department also filed two appeals, Nos. E/1352 and 1353/97 before this Tribunal against the grant of Modvat credit to M/s. JMPL by the Commissioner and these two appeals were disposed of by this Bench as per Final Order No. 1014 -1015/2001 dt. 29.6.2001 remanding the case to the Asst. Commissioner for considering the Revenue's objections before quantifying the Modvat credit admissible to the assessee. It appears that the present appeals were not considered by this Bench while passing the above final order in the departments appeal Nos. 1352& 1353/97.

(2.) AFTER hearing both sides and considering their submissions, we find that the final order dated 29.6.2001 passed by this Bench has not been challenged by the department or the assessee and, therefore, neither side is entitled to question the correctness of the said final order. What is under challenge in the present appeals is the original order passed by the Commissioner. That order had directed the divisional Asst. Commissioner to quantify the Modvat credit on inputs, admissible to the assessee (M/s. JMPL) and, accordingly, the AC quantified the credit in his order dated 17.9.96. This order of the AC stood impliedly set aside when the Tribunal, in final order dated 29.6.2001, directed that the Revenue's objections against grant of Modvat credit to the assessee also be considered by the AC before quantification of credit. There is no indication of the AC having passed fresh order in terms of the Tribunal's final order dated 29.6.2001.

(3.) IT is not in dispute that the AC's order dated 17.9.96 quantifying the Modvat credit pursuant to the Commissioner's direction was passed without considering the objections of the Revenue, which are required to be considered by him in terms of final order dated 29.6.2001 of the Tribunal. It is in these circumstances that we have found the AC's order dated 17.9.96 to have been set aside impliedly by the Tribunal in the above final order. A necessary consequence of this finding of ours is that the appeals filed by the assessee and the department before the Commissioner (Appeals) against the AC's order dated 17.9.96 are not maintainable.