CX - Affirming order passed by lower authorities without recording its own detailed findings does not render such findings as perverse on its own: High Court
By TIOL News Service
BANGALORE, JULY 16, 2018: THE appellants are manufacturers of Industrial Paints, Thinners and Powder Coatings and selling their products to their customers directly as well as through their distributors.
During the period September 2004 to September 2005, the appellant received back goods that were rejected by the customers as “sale return” and had taken credit based on the RBA series invoices, an intermediate document generated upon receipt of rejected/returned goods, after correlating them with the original duty paying document (known as IBA series invoice).
The credit of Rs.8,76,314/- was denied by the Revenue on the ground that the appellant had not received the original and duplicate invoices and also the credit on such returned goods had not been availed on the strength of customer's invoices.
The demand was confirmed by the lower authorities [o-in-o dated 27.11.2007 and o-in-a dated 07.03.2008] and in the first round of appeal before CESTAT the matter was remanded by Final Order dated 01.7.2008 for verification of documents furnished by the appellant.
As the original copy of the invoices as well as invoices from the customers could not be produced, the original authority by order dated 25.09.2008 once again confirmed the demand. The Commissioner(A) by his order dated 24.03.2009 remanded the matter and in denovo adjudication, the adjudicating authority allowed credit of Rs. 2,68,075/- and disallowed Cenvat credit of Rs. 6,08,239/-.This order was appealed but the Commissioner(A) upheld the same by his order dated 28.09.2010 .
The assessee again filed an appeal before the CESTAT and challenges the same on merits as well as on limitation.
The CESTAT upheld this order on 26.08.2016. Kindly see 2017-TIOL-83-CESTAT-BANG.
And so, the assessee is before the Karnataka High Court.
The High Court expressed its concern that none of the lower authorities had explained the abbreviations of the terms RBA, IBA, ERP used in the proceedings below.
Nonetheless, after getting to know about the same with clarity from the assessee, the High Court rejected the contention raised by the assessee that the Commissioner (Appeals) and the Tribunal could not have returned the findings beyond the case as per allegations contained in the Show Cause Notice.
The High Court observed –
"10. The learned Commissioner (Appeals) has clearly recorded finding that the partial relief to the extent of four consignments could not be given to the assessee for want of corroborative evidence. There is no question of these authorities going beyond the parameters of the Show Cause Notice. The Show Cause Notice given to the assessee in the present case was for disallowing the Cenvat Credit and therefore after having examined each and every transaction, if the Appellate Authorities who are the fact finding authorities under the Act have returned such findings of facts based on evidence, the same cannot be assailed on the ground that they have gone beyond the scope of the Show Cause Notice."
In the matter of the order passed by the Commissioner (Appeals) being affirmed by the CESTAT and the assessees objection to the same, the High Court remarked –
"9. We are of the opinion that while the second Appellate Authority affirms the orders passed by the first and the lower Appellate Authority, it need not record its own detailed findings and the affirmation of the order passed by Commissioner (Appeals) does not render such findings of the Tribunal perverse on its own."
Concluding that no substantial question of law arises in the case, the appeal was dismissed as being devoid of any merits.
(See 2018-TIOL-1346-HC-KAR-CX)
