By TIOL News Service

MUMBAI, SEPT 10, 2015: THIS case has had a tumultuous journey.

Against the Order-in-Original No.PUN-EXCUS-001-COM-008-13-14, Dated: 24.6.2013 passed by CCE, Pune-I, the assessee Rakhoh Enterprises had filed an appeal and in the matter of the stay application the CESTAT had while ordering pre-deposit held -

CX - Appellant is manufacturing anchor rings and load spreading plates and clearing the same without payment of duty on the assumption that the same are covered vide Not. 6/2006 dt.1.3.2006 or under Not. 12/2012 dt. 17.3.2012, as parts of wind-operated electricity generator (WOEG) - Revenue issued SCN on the ground that the same are not parts of WOEG and are chargeable to CE Duty - Demand of Rs.5.36crores confirmed: HELD - the appellant's products are used in civil foundation on which the tower is erected - prima facie these cannot be considered as part of WOEG though these may be required for providing stability to the tower -appellant has not been able to make out a case - no financial hardship pleaded - appellant directed to deposit 25% of the duty amount : CESTAT

We reported this order dated 17.12.2013 as 2013-TIOL-2032-CESTAT-MUM.

Against this order, an appeal was filed before the Bombay High Court and vide an order dated 25.02.2014 - 2014-TIOL-288-HC-MUM-CX it was ordered thus -

CX - Exemption - whether anchor rings and load spreading plates supplied to company setting up windmills is entitled for exemption under notification 6/2006-CE, 12/2012-CE  against the entry 'Wing operated electricity generator (WOEG) its components and parts including rotor and wind turbine controller' - Tribunal has given a finding that none of the cited decisions relied upon by the appellant are strictly on the point involved in the present case and accordingly ordered a pre-deposit of 25% of the duty amount of Rs.5,36,83,121/- this is not a fit case for interference with the impugned order of the Tribunal - appellant given more time to make pre-deposit and Tribunal directed to decide appeal expeditiously within 3 months from the payment of pre-deposit as matter of recurring nature - appeal disposed of: High Court.

Incidentally, two other appeals filed by Gemini Instratech in the year 2009 & 2010 were heard along with the appeal filed by the assesse in question, on 13.08.2014.

The Division Bench of the CESTAT in its order dated 25.09.2014, at the outset, commented -

In this order three appeals are being decided together because the issue involved is essentially the same in all cases.

The order passed by the Bench was-

CX - Notfn. 6/2006-CE, 12/2012-CE - Anchor rings and Load Spreading Plates are used in the foundation of wind mill tower and cannot be considered to be part of Wind Operated Electricity Generators - benefit of exemption not available; however in r/o Tower doors since contrary view taken matter referred to Larger Bench: CESTAT

Appeal rejected of Appellant 1/Reference to Larger Bench Appellant 2

We reported this order as 2014-TIOL-2110-CESTAT-MUM.

The long and short of this order was that the appeal of Rakhoh Enterprises was rejected whereas the matter involved in the case of Gemini Instratech was referred to the Larger Bench as in the case of the very same appellant (Gemini Instratech) the Division Bench had vide its order dated 13.02.2013 - 2013-TIOL-738-CESTAT-MUM allowed the benefit of the exemption in respect of Tower doors.

The matter did not end there.

Perhaps to obviate any future confusion and legal complexity, the Tribunal issued a corrigendum on 22.12.2014 and which reads -

CORRIGENDUM

Dated: December 22, 2014

In the above said matter, in Order No. M/1820/14/EB/C-II dated 13.08.2014/25/09/2014 issued on 08.10.2014, in annexure to the preamble appeal No. E/88906/13-Mum may be deleted, for which separate Order is issued i.e. A/791/14/EB/C-II dated 13.08.2014 issued on 19.12.2014.

In short, Appeal Nos. E/1813/10-Mum & E/407/09-Mum both in respect of Gemini Instratech Pvt. Ltd. are referred to Larger Bench vide Order No. M/1820/14/EB/C-II dated 13.08.2014/25/09/2014 and Appeal No. E/88906/13-Mum of M/s. Rakhoh Enterprises, is decided vide Order No. A/791/14/EB/C-II dated 13.08.2014 issued on 19.12.2014.

While reporting this order 2015-TIOL-137-CESTAT-MUM we quipped - Hope this solves the impasse.

We were wrong.

A ROM application was filed by Rakhoh Enterprises against the order dated 25.09.2014 - 2014-TIOL-2110-CESTAT-MUM.

While dismissing the application on 01.05.2015, the Bench held - 2015-TIOL-942-CESTAT-MUM -

CX - Duty demand along with interest upheld, however, penalty set aside - Appellant submitting that sine qua non for invoking extended period & imposing penalty u/s 11AC is one & the same, hence there is an error apparent on record. Held - as order was passed after considering all material facts and judgements, no patent mistake exists - ROM dismissed: CESTAT

Obviously, the matter could not have faded into oblivion because, as the assessee put it in his ROM application - It would be travesty of justice where manufacturers across the country are getting relief for supplying similar goods.

And so, the assessee is before the Bombay High Court with a Writ Petition.

The High Court, at the outset, observed -

+ Ordinarily, a Writ Petition would not have been maintainable against such an order, but it is stated that the Tribunal has also passed a further order on an application styled as miscellaneous application for rectification of mistakes. That also has been dismissed by the impugned order on 1st May, 2015. Against that order, an Appeal would not lie is the submission.

+ For the present Petition and its disposal, we do not wish to decide any larger question or controversy. We proceed on the footing that relegating the Petitioner to any other remedy, even if existing, would not be efficacious and expedient, bearing in mind the request of the Petitioner.

The petitioner, after narrating the course chartered by their appeal and two other appeals of the other corporate entity decided together by the Tribunal, submitted - "…if all three Appeals involve the same issue or the essential issue was identical therein, then, the Tribunal should have been consistent in its approach. It should have referred the Question in all three Appeals for opinion and answer by a larger Bench…That is how the interest of justice would have been served. However, singling out only the Petitioner's Appeal and deciding it without answering any legal question has prejudiced the Petitioner enormously... "

The High Court after considering the submissions made by both sides observed -

++ Prima facie, the Tribunal lost sight of the fact that it has to first conclude that all the products, namely, LSP and Anchor Rings, Tower Doors are foundational parts or not. We do not find a proper reference being made to all individual manufacturers, their products and thereafter what they claim as a part of WOEG. In para 12, the intention of the Government in issuing the Notification has been discussed and reference is made to an interim order in the case of the present Petitioner. Those interim findings and tentative views have been relied upon to distinguish the case of the present Petitioner from that of the others. Thereafter, in para 13, the Tribunal holds that the Counsel has not been able to satisfy that the terms 'windmill' and 'WOEG' are synonymous or used interchangeably. The guidelines and the forms filed as per requirement of Ministry are referred and on that basis and going by the language of the same, the Tribunal concludes that the Doors, Anchor Rings and LSP do not fall under the phrase 'WOEG'. Then reference is made to the Board letter of 1997, the Notification No.205/1988 dated 25th May, 1988, the judgment in the case of the co Appellants (Gemini) and we find in all matters a common conclusion has been reached that the Notification did not exempt WOEG and their parts. We do not see therefore any scope for the Tribunal then referring to individual facts pertaining to the present Petitioner and upholding the duty demand along with interest….

++ The Tribunal was aware of the controversy, the issue before it and stated to be common to all the Appellants. If there was justification for rendering a separate finding in the case of the Petitioner's Appeal, then, in the first instance it is not clear as to why it was clubbed along with other Appeals. If all three Appeals involve similar question and issue, then, it is not clarified as to what distinguishes only the present Petitioner's case from the other two Appeals. If the issue was of the Exemption Notification, its construction and interpretation, the intention of the Government in granting the exemption, then, it is common to all the Appellants. In the circumstances, we do not find any support for the argument of Mr.Mishra that the Tribunal's order is neither erroneous nor illegal.

++ We have found that there was a common thread and flowing throughout the order up to the discussion on the facts pertaining to the Petitioner's case. We do not find that there was any feature or aspect of the Petitioner's case which demonstrated and proved it to be a distinct or a different matter. No light has been thrown by the Tribunal or by the Revenue before us nor any distinguishing features, save and except noted above by us, are appearing from the record. The Tribunal, rather than deciding the issue and construing and interpreting the Exemption Notification, has thought it fit to refer the same to a larger Bench. For, it thought that it may be arising in future cases. If the question or issue is of general public importance, requiring an authoritative pronouncement, then, we have not found any reason, much less cogent and satisfactory for leaving out the Petitioner from the Reference. The Petitioner's case also requires interpretation of the same Notification and its construction is also an issue in the Petitioner's case. Therefore the Tribunal should have formulated the same question even in the case of the Petitioner's Appeal and referred all three matters to be decided and by a larger Bench.

++ This mistake and which was apparent could have been rectified in the rectification proceedings, but the Tribunal failed to exercise its powers and the jurisdiction vested in it by law.

The Tribunal's order dated 25th September 2014 - 2014-TIOL-2110-CESTAT-MUM was quashed and set aside.

The High Court directed that in the case of the present Petitioner M/s. Rakhoh Industries Pvt. Ltd. as well the issue and inter alia framed in para 20 shall be referred for decision by a larger Bench.

And that, after the larger Bench renders a decision or answers it or opines on the issue referred to it, the Tribunal shall decide all the three Appeals in accordance with law in tune with the construction and interpretation of the Notification and the answer of the larger Bench.

The Writ petition was allowed.

(See 2015-TIOL-2086-HC-MUM-CX)