Full Judgment
2. The appellants manufacture prestressed concrete sleepers for the Railways. The manufacture is under contract which contains provision for price variation. Some inputs like MCI inserts and HTS Wires are supplied by the Railways. Under two contracts manufacture for the period July, 1992 to June, 1996 were undertaken. Since the contract provided for price variation, a show cause notice dated 1-4-98 was issued by the Superintendent asking the assessee to show cause why a differential duty of about Rs. 35 Lakhs should not be paid by them in respect of the goods cleared from August, 1992 to June, 1996. The demand was confirmed by the Assistant Collector vide his Order-in Original No. 109/98, dated 27-11-98. Dissatisfied with that order the appellants moved the Commissioner (Appeal) and that Commissioner remanded the case vide his Order in Appeal No. 29 (KDT) CE JPR-II 2000, dated 12-1-2000 for re-consideration of the case after taking into account detailed information about cost of materials produced by the appellants. On reconsideration of the case, Asstt. Commissioner passed a fresh order holding that during the period in question, though higher duty was payable on account of the increased price of MCI, for the same reasons higher duty had been paid in respect of HTS Wires. After making adjustments of the amounts of duties paid, the Assistant Collector confirmed a duty demand of Rs. 1,16,790.94 vide his Order in Original No. 55/2000, dated 14-6-2000. The order also noted that this amount had already been deposited by the assessee on 23-2-1999. The Revenue filed an appeal against this order before the Commissioner (Appeals). The impugned order-in-appeal has been passed on that appeal of the Revenue.
It has been held that the action of the Asstt. Collector in allowing adjustments, taking the entire periods as one, was not justified. He, therefore, ordered that a separate order should be passed for the period August, 1992 to 7-8-95. The impugned order has further directed that the Jurisdictional Deputy/Asstt. Commissioner will confirm the demand as per price variation on MCI inserts. The order has left the assessee at liberty to make their separate claim in respect of excess payment for HTS Wires.
3. In the present appeal, it is the submission of the assessee that the order passed by the Commissioner (Appeals) is grossly unjust in the facts of the case. The learned Counsel for the assessee submitted that from the show cause notice to the order-in-appeal price finalization for the entire period of 1992 to 1996 was taken up together. While there was escalation in respect of one item, there was price fall in respect of the other. It is the submission of the assessee's Counsel that it was just and proper that the higher duty in regard to one be set off against the lower duty in respect of the other and net amount alone be made payable. It is contented by the Counsel for the appellants that separate finalization of the assessment for the periods would only create avoidable paper work and hardship to the appellants.
He also pointed out that the whole exercise of making separate assessments cannot lead to any different result in regard to Revenue inasmuch as assessments being provisional for the entire period, upon their finalization, the differential amounts would be payable by either side. As against the aforesaid submissions on behalf of the assessee, the learned SDR has pointed out that since the periods were covered by two separate contracts and the question of MCI inserts were involved only for the period up to 1995, the Commissioner (Appeals) was right in ordering separate finalization of assessments for the two periods.
4. The appeal of the Revenue contents that the impugned order is required to be set aside since it is an order of remand. It is pointed out that the Commissioner had no power to pass an order of remand in view of the amendment of Section 35A(3) of Central Excise Act with effect from 15-11-2001. It is pointed out that the amendment deleted the Clause relating to remand of the case for fresh adjudication to the original authority from the erstwhile Section 35A(3) and in view of that amendment, a Commissioner (Appeals) cannot pass an order of remand but can only pass an order on merits.
5. The provisional assessments from 1992 to 1996 in terms of the two contracts were taken up for finalization together. The show cause notice which initiated the proceedings which culminated in to the passing of the impugned order related to the assessments for the entire period. We are, therefore, unable to find any error on the part of the Asstt. Collector in taking up the assessment for the entire period together. Moreover, his order was passed pursuant to an order of remand by the Commissioner. The direction in that order of remand was to take up the finalization of the assessment for the period 1992-96 based on the documents produced. If the revenue found that order of remand to be incorrect or illegal, they should have taken up that order-in-appeal.
Having not done so it was not upon to them to object to the combined finalization of assessments under two contracts for the period 1992-96.
Even otherwise we are not able to find any merit in the objection relating to taking up of the assessments under both the contracts together for finalization. All the assessments being provisional, they were required to be finalized and differential duty, if any, arising on account of the finalization adjusted. No case has been made out that the adjustments made are incorrect. In fact, the appellant had already deposited the differential duty due from them even before passing the adjudication order. Re-opening of these assessments merely for the purpose of finalizing them separately for two periods is an avoidable duplication of work and is ultimately of no consequence to either side.
Accordingly, we are of the opinion that the appeal of the assessee is required to be allowed. If the appeal of the assessee is allowed on merits, the objection of the Revenue that the Commissioner could not have passed an order of remand becomes academic and of no consequence.
6. In view of what has been stated above, Appeal No. E/1964/2002/NB/A filed by the assessee M/s. Daya Engg. Works is allowed after setting aside the impugned order-in-appeal. The appeal E/1980/2002 NB/A filed by CCE Jaipur is rejected.