NOVEON DIAMALT PVT. LTD., ORCHID Vs. CCE

JUDGEMENT

(1.) ALL these three appeals arise from a common Order -in -Appeal No. 113, 58 and 32/2002 (M -III) dt. 24.7.2002 passed by the Commissioner (Appeals), Chennai. The Commissioner (Appeals) in the penultimate paragraph has noted that the issue is a covered matter, therefore, he proposed to take up all these three appeals for final disposal. He has passed an order on similar issue in respect of M/s. BalmerLawrie Freight Containers Ltd., Chennai, in Order in Appeal No. 1/2002 (M -II) dated 18.1.2002 and held the view that duty has to be collected as per Board's circular dated 6.2.2001. In that view of the matter he dismissed all these three appeals. It is the contention of Ld. Counsels appearing in these matters, that the order is not a speaking order and the Commissioner ought to have taken up individual appeals independently and should have dealt with the matter in the light of the facts of each case. In one of the appeals that is in the case of Noveon Diamalt Pvt. Ltd., Ld. Counsel Shri A.S. Sundarajan submits that their case pertained to claim of refund of excess amount paid by them. He submits that their refund claim was rejected without an issue of Show Cause Notice and on that ground itself the matter should be sent back for de novo consideration. He points out to page 31 of the paper book where in the Deputy Commissioner (Customs), Ministry of Commerce, Madras Export Processing Zone, issued a Circular No. S59/6(5)/2001/MPEZ dated 23.2.2001. It was stated therein that exporters should pay short duty in terms of the calculations arrived therein and as communicated to them. It also stated that if they do not pay the amount then action would be taken under the law. It is the Counsel's submission that this was a general circular, which could not be implemented by the lower authorities without issue of a Show Cause Notice to the individual units and without taking explanations from them. He also pointed out to the Order in Original No. S59/6/(5)/2001 dt. 20.6.2001, at page 35 wherein the Deputy Commissioner has passed the order confirming the amounts despite the appellants having asked for a speaking order and to follow the procedures laid down for adjudication. He also submits that in the said Order in Original, the Deputy Commissioner has confirmed the demands for the period 23.2.2000 to 22.2.2001, whereas, the Circular 6/2001 referred to the period on or after 16.9.99. Therefore, he submits that the period 16.9.99 to 22.2.2000 is not covered by the circular. He, therefore, had claimed for refund of the amount paid for the said period. He submits that the entire proceedings were violative of Principles of Natural Justice and it was not a proper order as there was an error of appreciating the Board's Circular. Hence, he seeks for remand of the matter, so that a proper order is passed in terms of the submissions made by them.

(2.) LD . Counsel Shri R. Raghavan submits that his matter pertaining to M/s. Orchid Chemicals. The authorities had likewise proceeded in their case on the basis of the circular however, by issue of Show Cause notice, demanding duty to a tune of Rs. 79,10,645 under Section 11A of the Act and Notification No. 2/95 -CE dated 4.1.95, as amended which arose on account of wrong calculation for the period February, 2000 to January, 2001. He submits that they had filed a detailed reply to the Show Cause Notice and contested the matter. It is his submission that the demands are not substantiated as the circular in question was issued in February, 2001, and it does not have retrospective effect. Therefore, the demand for the period prior to February 2001, cannot be sustained.

(3.) LD . Counsel referred to the Final Order No. 238/2002 dated 11,11.02, in the case of M/s. Futura Polymers Ltd. v. CCE, Chennai, rendered by the Tribunal on the same issue, wherein the Tribunal has held that the said circular which is under reference has got only prospective applicability. He submits that on this aspect, the Apex Court judgment in the case of H.M. Bags Manufacturer v. Collector of Central Excise, 1997 (94) ELT 3 (SC) is applicable, has clarified that where a Circular/Order passed under Section 37B of the Central Excise Act will have effect from the date of its publication. He therefore, submits that the Commissioner (Appeals) was not right in clubbing all the three different appeals and in following his own order in the case of M/s. Balmer Lawrie Freight Containers Ltd., Chennai, in Order in Appeal No. 1/2002 (M -III) dated 18.1.2002, which has no effect in view of the Tribunal's judgment. He further pointed out that in the copy of the order passed in the case of Balmer Lawrie was not furnished and he is not in a position to make any submission on the same. He submits therefore waiver of pre -deposit may be granted to the appellants. The stay application and the appeal could be taken up for de novo consideration as the matter requires remand to the original authority.