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CX – Commissioner arriving at a decision based on his own fabricated allegation which is not existing in SCN makes the entire denovo adjudication futile: CESTAT

2019-TIOL-2485-CESTAT-AHM

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH, AHMEDABAD

Appeal Nos. E/11467-11468/2018-DB

Arising out of OIO-SUR-EXCUS-000-COM-032-17-18, Dated: 13.03.2018
Passed by Commissioner of Customs, Central Excise and Service Tax – Surat-I

Date of Hearing: 23.10.2018
Date of Decision: 21.02.2019

M/s H K IMPEX PVT LTD
SHRI DEEPAK AGARWAL
SHRI SHARAD GUPTA

Vs

COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX 
SURAT-I

Appellant Rep by: Mr J C Patel & Rahul Gajera, Advs.
Respondent Rep by: Mr Sameer Chitkara AR

CORAM: Ramesh Nair, Member (J)
Raju, Member (T)

CX – This is a case of recovery of erroneous refund under Section 11A on the ground that the assessee have neither received the inputs covered under duty paying cenvatable documents nor sent to the job worker for getting the final product manufactured, therefore, the credit availed by assessee is not admissible and consequently, the rebate of the same obtained by assessee under Rule 18 is also not correct and legal – The refund was sanctioned at the initial stage after verifying the procedure followed by assessee – However at a later stage on the basis of intelligence it was revealed by Revenue that the assessee have taken the refund of duty paid on inputs whereas the same inputs were not received by them nor the same were sent for job work for manufacturing of export goods – However the adjudicating authority confirmed the demand mainly on the ground that the process carried out by the job worker is amount to manufacture whereas as per para 4 of notfn 21.2004-CE(NT) the job worker are authorized only to carry out the activity such as test, repairs, refining, reconditioning or manufacture of intermediate products – The matter was reached up to the Tribunal and thereafter remanded to Commissioner for de novo adjudication – At the stage of de novo adjudication, raising a fresh issue which is not existing within the four corners of allegation made in the SCN, is not permitted under the settled law – Since the Commissioner decided the de novo adjudication on the basis of his own fabricated allegation which is not existing in SCN, entire de novo adjudication become futile and accordingly the impugned order cannot stand – Matter remanded to the adjudicating authority: CESTAT

Matter remanded

FINAL ORDER NOS. A/10341-10343/2019

Per: Ramesh Nair:

This is a case of recovery of erroneous refund under Section 11A on the ground that the appellant have neither received the inputs covered under the duty paying cenvatable documents nor sent to the job worker for getting the final product manufactured, therefore, the credit availed by the appellant is not admissible and consequently, the rebate of the same obtained by the appellant under Rule 18 is also not correct and legal.

2. Sh. J C Patel Ld. Counsel and Sh. Rahul Gajera Ld. Advocate appeared for the appellants. He submits that this is second round of appeal before this Tribunal. In the first round this Tribunal vide order dated 25.06.2014 remanded the matter to the Commissioner for fresh adjudication with certain observations and directions. He submits that Ld. Commissioner in de novo adjudication has gone into altogether different issues which are not arising out of the SCN, therefore, his order clearly travelled beyond the scope of SCN. He submits that the Ld. Commissioner went into the issue regarding the nature of process carried out by the job worker and it was observed that the job worker was authorized to carry out only process specified under para 4 of the Notification No. 21/04-CE(NT) and not for manufacturing of final product. He submits that the demand for recovery of refund was raised only on the ground that the appellant have not received the inputs which are covered under the duty paying invoice on which rebate claim was sanctioned, therefore, visiting on the issue of nature of process at this stage is neither flowing from the SCN nor even from the remand order of the Tribunal. He also made detail submission on the facts and legal issues.

3. Sh. Sameer Chitkara Ld. Additional Commissioner (AR) appearing on behalf of the revenue reiterates the findings of the impugned order.

4. We have carefully considered the submission made by both the sides and perused the records. We find that the refund was sanctioned at the initial stage after verifying the procedure followed by the appellant. However at a later stage on the basis of intelligence it was revealed and alleged by the Revenue that the appellant have taken the refund of duty paid on the inputs whereas the same inputs were not received by them nor the same were sent for job work for manufacturing of export goods. However the adjudicating authority confirmed the demand mainly on the ground that the process carried out by the job worker is amount to manufacture whereas as per para 4 of notification 21.2004-CE(NT) the job worker are authorized only to carry out the activity such as test, repairs, refining, reconditioning or manufacture of intermediate products. It is observed that these charges were not raised either at the time of sanction of refund/rebate nor even in the SCN which is a subject matter of this case. The matter was reached up to the Tribunal and thereafter remanded to the Ld. Commissioner for de novo adjudication. At the stage of de novo adjudication, raising a fresh issue which is not existing within the four corners of the allegation made in the SCN, is not permitted under the settled law. Since the Ld. Commissioner decided the de novo adjudication on the basis of his own fabricated allegation which is not existing in the SCN, entire de novo adjudication become futile and accordingly the impugned order cannot stand. We, therefore, set aside the impugned order and remand the matter to the adjudicating authority for passing a fresh order without going into the issue which are not existing in the SCN and by considering the observation made by this Tribunal in the earlier remand order dated 25.06.2014. All the issues are kept open. Appeals are allowed by way of remand to the adjudicating authority.

(Pronounced in the open court On 21.02.2019)

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