The Commissioner of Central Vs. Hari Steel Tubes - Court Judgment

Excerpt:

.....lml ltd. wherein it has been held that the appeal filed by the revenue is not maintainable as the order impugned has already been merged with final order passed by the tribunal much before any order was passed by board of revenue under section 35 e(1).he has also relied on the apex court judgment wherein it was held that the final order was already passed by the tribunal prior to review of commissioner's (appeals) order by board, order passed by the commissioner (appeals) has already been merged with final order passed by the tribunal much before any order passed by board. it is further stated that in para 3 of the grounds of the appeal, the revenue has started to club the clearance of the respondent with a private ltd company and partnership firm without making them necessary parties. he relied on the decision of the apex court reported in 2006 (199) elt a-129 (sc) wherein it was held that in the absence of show cause notice to another unit, the value of the clearance of such another unit cannot be clubbed with the value of the clearance of the appellants. he also relied on the board circular under section 37b of the central excise act and the order no. 213/14/92-cx.6 dated.....

Judgment:

1. The Revenue has filed this appeal against the-Order-in-Appeal No.16/2005 (H-IV) (D) CE dated 20.06.2005, passed by the Commissioner of Customs and Central Excise (Appeals), Hyderabad.

The Additional Collector of Central Excise passed an Order-in-Original No. 25/2004 dated 16.4.2004 against the appellants demanding duty for clandestine clearance and also imposing various penalties. Against that order, the assessee (the Respondent in this case) filed an appeal to the Commissioner (Appeals). The Commissioner (Appeals) passed an order dated 30.7.2004. In that order, he had set aside the order dated 16.4.2004 passed by the Additional Commissioner. Later the Department examined the Order-in-Original dated 16.4.2004 and filed an appeal before the Commissioner (Appeals). The date of review of the Order-in-Original dated 16.4.2004 by the Commissioner, Hyderabad-IV Commissionerate, is 11.4.2005. The Commissioner (Appeals) considered all the aspects and passed the impugned order. In the impugned order, he has dismissed the Departmental appeal for the reason that the Order-in-original passed by the Additional Commissioner has already been merged with the Order-in-Appeal dated 30.7.2004. The Department is aggrieved over the impugned order and come before the Tribunal for relief on the ground that the doctrine of merger is not applicable. They relied on the following case laws: (i) Maithan Ceramic Ltd. v. Commissioner of Central Excise, Jamshedpur 2002 (146) ELT394 (Tri. - LB.) (ii) Commissioner of C. Ex., Chandigarh v. Standard Tapulin Industries 3. Shri K. Sambi Reddy, learned JDR appeared for the Revenue urged that the Department has got one year period for review of the Order-in-Original and the review has been done within time. Therefore he said that the Commissioner (Appeals) should not have dismissed the Revenue's appeal.

4. Shri L.N. Goyal, learned Advocated appeared for the respondents urged that the review by the Commissioner on 11.4.2005 is much after passing of the Order-in-Appeal dated 30.7.2004 on the assessee's appeal when the Order-in-original has already been merged in the Commissioner's (Appeals) order dated 30.7.2004. The learned Advocate relied on the Tribunal's Larger Bench judgment rendered in the case of CCE v. LML Ltd. wherein it has been held that the appeal filed by the Revenue is not maintainable as the order impugned has already been merged with Final Order passed by the Tribunal much before any order was passed by Board of Revenue under Section 35 E(1).

He has also relied on the Apex Court judgment wherein it was held that the Final Order was already passed by the Tribunal prior to review of Commissioner's (Appeals) order by Board, order passed by the Commissioner (Appeals) has already been merged with Final Order passed by the Tribunal much before any order passed by Board. It is further stated that in Para 3 of the Grounds of the Appeal, the Revenue has started to club the clearance of the Respondent with a Private Ltd Company and partnership firm without making them necessary parties. He relied on the decision of the Apex Court reported in 2006 (199) ELT A-129 (SC) wherein it was held that in the absence of show cause notice to another unit, the value of the clearance of such another unit cannot be clubbed with the value of the clearance of the appellants. He also relied on the Board Circular under Section 37B of the Central Excise Act and the Order No. 213/14/92-Cx.6 dated 29.05.1992.

5. We have gone through the records of the case carefully. The Commissioner (Appeals) in the impugned order has given clear reason for rejecting the Revenue's appeal. Para 6 of the impugned order is reproduced herein below: 6. I have gone through the case records and grounds of appeal. I have also perused the impugned order. The Respondents are contesting that the Appellate Commissioner had already passed an order in this case on appeal filed by them vide Order-in-Appeal No. 71 to 76/2004 (H-IV) CE dated 30.7.2004 and the Department filed the present appeal subsequent to passing of the above order hence not maintainable. I have gone through the Order-in-Appeal No. 71 to 76/2004 (H-IV) CE also. I find that my Colleague Commissioner had set aside the order passed by the Additional Commissioner way back in July 2004. Therefore, the Adjudication Order (impugned order) stands modified accordingly. This order was passed in July 2004 whereas the Department has filed the present appeal on review much later i.e., after passing of the Order-in-Appeal by the Commissioner (Appeals), through the Department has got one year time to appeal against an order passed by the Adjudicating Authority under Section 35E (4) of the Central Excise Act, 1944, the fact remains that an appellate order setting aside the impugned order is has already been passed. If the Department was aggrieved by the impugned order, the objection or appeal should have been filed when the party's appeal was at hearing stage before the Commissioner (Appeals) and before passing of the Order-in-Appeal by Commissioner (Appeals). Hon'ble Tribunal in the case of Jindal Strips Ltd. v. CCE, New Delhi held that when Collector (Appeals) allowed an appeal against the order of the Assistant Collector that order is deemed to have merged with the Appellate Order and a second appeal against the same order by Revenue before Collector (Appeals) not maintainable. In view of the discussion above and following the ratio of the judgment cited above, I hold that the present appeal is not maintainable. Accordingly, I pass the following order.

The case laws relied on by the Revenue are distinguishable. In the case of Maithan Ceramic Ltd. (supra), the question of law which was raised is whether the Tribunal can consider the appeal on merits when the same has been dismissed by the Commissioner (Appeals) as having been filed after a period of six months from the date of receipt of the Order in terms of Provisions of Section 35B of Central Excise Act, 1944. This was not the issue in the present case. In the case of CCE, Chandigarh v. Standard Tapulin Industries (supra), when the party's appeal was heard, the Revenue's appeal was pending. It was observed that due to mistake that two appeals were not heard together. Hence it was held that the doctrine of merger does not arise in the facts of the case.

However, in the present case, that is not the situation. The relevant dates had already been given in the brief facts. It is seen that when the party's appeal was heard by the Commissioner (Appeals), the Revenue's appeal was not pending before the Commissioner (Appeals).

Long after the party's appeal was decided by setting aside the Additional Commissioner's order, the Revenue filed an appeal. In other words, when the Revenue has filed its appeal against the Additional Commissioner's order, the said order did not exist and it merged with the Order-in-Appeal dated 30.7.2004. The doctrine of merger is clearly applicable in the present case. In such circumstances, the impugned order is legal and proper. The Revenue's appeal has no merit and the same is dismissed.

(Operative portion of the order has been pronounced in the open court on completion of hearing)