By TIOL News Service

ALLAHABAD, MAY 22, 2016: QUICK FACTS: The adjudication order was passed by the Commissioner, Central Excise, Kanpur on 31.7.2006 confirming the duty demand of Rs.29,25,212/-along with imposition of penalties and interest &appeals were filed in the same year by the assessee. By a common order dated 15.02.2013, the Tribunal concluded that there was no suppression or mis-statement on the part of the assessee legitimizing invocation of the extended period of limitation and that initiation of proceedings was, therefore, barred by limitation. Against this order, the Revenue had filed applications seeking  inter-alia  recall of the final order No.55592- 55593/2013-Ex.(Br.) dated 15.2.2013; to restore those appeals for fresh hearing; permit the Department (Revenue) to produce additional evidence in support of its case and incidental relief. These applications were rejected by order dated 20.10.2014 2014-TIOL-2634-CESTAT-DEL and which order has now been appealed.

The Bench had in its order dated 20.10.2014 while rejecting the Miscellaneous applications filed by Revenue held thus -

CX - Revenue filing Miscellaneous applications on 13.11.2013 & 21.07.2014 seeking recall of final order dated 15.2.2013 passed by Tribunal; to restore appeals for fresh hearing and permission for production of additional evidence - Section 35C(2) of the Act does provide for review of order passed - Grant of the power (of rectification) is subject to a specified limitation period and is authorised to be exercised in clearly specified circumstances, namely for rectification of a mistake apparent from the record - applications by Revenue fall outside the ambit of the rectification power consecrated to Tribunal   qua   the express legislative grant under Section 35C(2) of the Act - miscellaneous applications are misconceived - Applications rejected both on ground of the bar by limitation under Section 35C(2) and on the ground that Revenue failed to establish fraud as the factor vitiating the earlier order dated 15.2.2013: CESTAT [para 11, 12]

CX - Revenue does not plead nor establish before that order dated 15.2,2013 is vitiated on account of any fraudulent document which was the basis for the conclusion as to illegality of invoking te extended period of limitation - Revenue's contention is that the declarations dated 14.4.2003 and 12.4.2004 (relevant to FY 2003-04 and 2004-05) were never filed by assessee - This assertion is predicated on the fact that originals of these declarations are not currently available in Revenue records - Inference that the assessee did not file these declarations is based on the singular fact that there are overwritings/ interpolations in the receipt register of 2003-04, as opined by the Forensic Consultant - On the basis of this opinion, Revenue seamlessly proceeds to conclude that the interpolations were the product of a collaborative effort of some unknown officers of the Department, at the behest of or in connivance with the assessee. There is no interconnecting evidentiary material furnished for this ethereal leap to the conclusion. Nothing is placed before Bench to establish whether any departmental officer was found guilty of interpolations of the receipt register. No inculpatory statement was recorded from the assessee to support any conclusion as to its participation in tampering of Government records; No officer in-charge of pursuing the case of Revenue during 2006 to 2013 (pendency of the appeal), has been proceeded against for failing to rebut assessee's pleadings or to verify existence of the declarations in official records - Revenue has failed to establish fraud: CESTAT [para 15]

So, the Revenue is before the Delhi High Court with the following substantial questions of law -

(1) Whether the benefit of Notification No.08/2003-CE dated 1 March 2003 under the facts and circumstances of the case can be extended to the party?

(2) Whether the benefit of exemption notifications can be extended to the party only on the basis of the forged documents prepared subsequently?

The High Court narrated the facts of the case and the events that transpired in the interregnum till the filing of the present appeal by the Revenue &concluded thus -

++ It is, therefore, clear that for a long period of seven years, the appellant did not take up any plea that the declarations dated 14 April 2003 and 12 April 2004 which the assessee claimed to have filed were actually not filed and only photostat copies were filed. This plea was also not taken up during the process of adjudication or during the pendency of the appeal before the Tribunal and it was only after a period of six months after the final order was passed by the Tribunal that the original receipt registers were forwarded on the basis of which the department concluded that the order was obtained on the basis of fraud and interpolations. No explanation whatsoever has been given as to why such a plea was not taken up at the first instance.

Holding that no substantial question of lawarises for consideration, the Revenue appeal was dismissed.

(See 2016-TIOL-982-HC-DEL-CX)