2014-TIOL-2305-CESTAT-DEL IN THE CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST BLOCK NO.2 R K PURAM, NEW DELHI COURT-I Excise Appeal No.60618 of 2013 with Excise Stay No.61818/2013 Arising out of the Order-in-Appeal No. 02-35-CE/ Appl /ADC/2013 Dated: 07.10.2013 Passed by the Commissioner Central Excise (Appeals), Delhi-I Date of Hearing: 2.9.2014 Date of Decision: 2.9.2014 M/s RGL CONVERTERS Vs COMMISSIONER OF CENTRAL EXCISE, DELHI-I Appellant Rep by: Shri S Sunil, Adv Respondent Rep by: Shri Yashpal Sharma, DR CORAM: G Raghuram , President (J ) R K Singh, Member (T) CE - Ignoring judicial discipline and recording conclusions diametrically contrary to judgment of Tribunal is either illustrative of gross incompetence or clear irresponsible conduct and a serious transgression of quasi-judicial norms – Revenue to pay litigative costs: CESTAT [ para 10, 11, 12, 15] CE – Excisability – s.2(f) of CEA, 1944 – Manufacture - Procurement of Cork Tipping Base Paper including ''Other Uncoated Paper and Paper Board in rolls or sheets, including jumbo rolls of specified width and length”, trimming of jumbo rolls and then printing in rotary printing machines with specific designs with the aid of non-toxic, non-poisonous & specially formulated food grade liquid printing ink & thereafter slitting the rolls to required width is not a process of manufacture, hence not excisable: CESTAT [ para 13, 14] Appeal allowed Case laws cited: RGL Converters 2003(154) ELT 711 (T) (Tri. Del.)... Paras 7, 8, 9, 13…followed RGL Converters 2005 (191) ELT 145 (Del.)... Paras 8…followed Lakshmi Packaging vs , CCE-2000(117) ELT 333 (Tri.) ... Paras 9…relied upon Commissioner vs. Lakshmi Packaging - 2000 (120) ELT A191 (SC)... Paras 13…relied upon FINAL ORDER NO.53449/2014 Per: G Raghuram : Heard learned Counsel for the appellant Shri S. Sunil and ld. DR Shri Yashpal Sharma for the respondent-revenue. 2. Assessee is the appellant. The appeal is preferred against an order dated 07.10.2013 passed by ld. Commissioner (Appeals) Delhi-I. The appellate Authority disposed of two appeals preferred by the assessee against adjudication orders dated 26.10.2012 and 21.02.2013. This appeal is preferred against the order of the lower appellate Authority in so far as it pertains to rejection of the assessee's appeal against adjudication order bearing reference No.07/HMA/ADC/D-I/2013 dated 21.02.2013. 3. Proceedings were initiated against the assessee vide show cause notice dated 17.04.2012 covering the period 01.04.2011 to 31.03.2012, alleging removal of excisable goods without remittance of duty and transgression of other provisions of Central Excise Act, 1994 and the rules thereunder. The show cause notice proposed levy and recovery of Duty alongwith interest and penalties, as specified. 4. The assessee is a manufacturer of Printed Cork Tipping Paper (PCT). The relevant process involves procurement of Cork Tipping Base Paper (CKT) including ''Other Uncoated Paper and Paper Board in rolls or sheets, including jumbo rolls of specified width and length. The jumbo rolls are first trimmed on their edges to remove torn portions and then printed in rotary printing machines with specific designs with the aid of non-toxic, non-poisonous & specially formulated food grade liquid printing ink (purchased from manufacturers of those products). Thereafter the rolls are slit to the specified, required width. 5. Revenue proceeded on the premise that on account of this process a new product emerged, which bears a different name. characteristic and classification i.e. Printed Cork Tipping Paper (PTC), classifiable under CETH No.48239014. 6. After a due process, the Additional Commissioner, Delhi passed the order dated 21.02.2013 confirming Duty liability of Rs.24 ,70,163 /- apart from interest and penalty, under Rule 25 of the Central Excise Rules, 2002. 7. Before the primary Authority, the assessee placed reliance on several decisions of this Tribunal including a decision inter partes reported in 2003(154) ELT 711 (T) (Tri. Del.) for the proposition that the alleged process does not amount to manufacture, exigible to Duty. In para 24.1, the primary Authority after adverting to the several precedents referred to, including the decision of this Tribunal (supra) observed that since the judgment of this Tribunal was appealed before the Delhi High Court but the High Court had dismissed Revenue's appeal only on the ground of limitation and not on merits, the Tribunal decision had not attained finality; thus treating this decision as unworthy of efficacy as a binding precedent. 8. Aggrieved by the primary order, assessee preferred an appeal which stands rejected by the impugned order. Para 6 of the impugned order clearly adverts to the contention urged on behalf of the assessee, that the controversy is no longer res- integra in view of the decision of this Tribunal reported in 2003 (154) ELT 711 (T) . This paragraph also records the contention of the assessee that the Tribunal's decision had attained finality as Revenue's appeal filed there against was rejected by the Delhi High Court, vide the judgment reported in 2005 (191) ELT 145 (Del.) . In para 8, the appellate order holds that the issue has not attained finality, since the appeal preferred by Revenue (against Tribunal's judgment inter partes ) was dismissed by the Delhi High Court only on the ground of limitation and not on merits. 9. The judgment of the Tribunal reported in 2003 (154) ELT 711 (Tri. Del.) clearly ruled, following an earlier decision in Lakshmi Packaging vs , CCE-2000(117) ELT 333 (Tri.) , that the process (involved in the transaction in lis ) does not amount to manufacture nor is exigible to Excise Duty. 10. It is axiomatic that judgments of this Tribunal have precedential authority and are binding in all quasi-judicial authorities (Primary or Appellate), administering the provisions of the Act, 1944. If an adjudicating authority is unaware of this basic principle, the authority must be inferred to be inadequately equipped to deliver the quasi-judicial functions entrusted to his case. If the authority is aware of the hierarchical judicial discipline (of precedents) but chooses to transgress the discipline, the conduct amounts to judicial misconduct, liable in appropriate cases for disciplinary action. 11. It is a trite principle that a final order of this Tribunal, enunciating a ratio decidendi , is an operative judgment per-se ; not contingent on ratification by any higher forum, for its vitality or precedential authority. The fact that Revenue's appeal against the judgment of this Tribunal was rejected only on the ground of bar of limitation and not in affirmation of the conclusions recorded on merits, does not derogate from the principle that a judgment of this Tribunal is per se of binding precedential vitality qua adjudicating authorities lower in the hierarchy, such as a primary adjudicating authority or a Commissioner (Appeals). This is too well settled to justify elaborate analyses and exposition, of this protean principle. 12. Nevertheless, the primary and the lower appellate Authorities in this case, despite adverting to the judgment of this Tribunal and without concluding that the judgment had suffered either a temporal or plenary eclipse (on account of suspension or reversal of its ratio by any higher judicial authority), have chosen to ignore judicial discipline and have recorded conclusions diametrically contrary to the judgment of this Tribunal. This is either illustrative of gross incompetence or clear irresponsible conduct and a serious transgression of quasi-judicial norms by the primary and the lower Appellate Authorities, in this case. Such perverse orders further clog the appellate docket of this Tribunal, already burdened with a huge pendency, apart from accentuating the faith deficit of the citizen / assessee, in departmental adjudication. 13. In the light of the judgment of this Tribunal in RGL Converters vs. CCE-2003 (154) ELT 711 (T) the issues stand concluded in favour of the assessee. We also note that this decision quoted with approval and had followed an earlier decision in Lakshmi Packaging (supra). The decision in Lakshmi Packaging Pvt. Ltd . was unsuccessfully appealed against in Commissioner vs. Lakshmi Packaging - 2000 (120) ELT A191 (SC) . The Supreme Court dismissed Revenue's appeal. 14. In the circumstances at the stage of considering the stay application, we dispose of the substantive appeal with the consent of both parties and after hearing them elaborately on the merits of the appeal and do so after waiving pre deposit. On the preceding analyses, the appeal is allowed and the concurrent orders of the primary Authority and of the Ld. Commissioner (Appeals) Delhi - I dated 07.10.2013 (impugned) are quashed. 15. In the circumstances and since the Authorities below have adjudicated against the assessee, despite and clearly contrary to the binding precedent and thereby subjected the assessee to an avoidable litigative trauma and the accompanying expenditure, we allow the appeal with costs of Rs.10 ,000 /- payable by Revenue to the appellant - assessee within one month from the date of receipt of this order. 16. We direct that copies of this order be communicated to the Central Board of Excise and Customs and to the Secretary (Revenue), Ministry of Finance, Government of India, for information.
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