Parveen Tobacco Co. vs Commissioner of Central Excise

This is an appeal under Section 35G of the Central Excise Act, 1944 (''Act'') by the Assessee against the Final Order dated 30th March, 2015 passed by the Customs, Excise and Service Tax Appellate Tribunal (''CESTAT'') in Appeal No. 2198/2006-EX (DB) [2015 (328) E.L.T. 220 (Tri.-Del.)] allowing the appeal of the Commissioner of Central Excise, i.e. the Department. By the said impugned order the CESTAT set aside the Order-in-Appeal dated 27th May, 2006 passed by the Commissioner (Appeals), Central Excise, Delhi-I by which the order-in-original dated 3rd November, 2005 passed by the Additional Commissioner (Central Excise) was set aside. Admit.

The following question of law is framed for consideration:

"What is the effect of non-production by the Department in its appeal before the CESTAT of the original records such as RG-1 register and RT-1 returns which have been referred to by the Commissioner (Appeals) in the order under appeal in favour of the Assessee?"

When the appeal was heard on 5th October, 2015 Mr. C. Hari Shankar, learned Senior counsel appearing for the Appellant, drew attention to the fact that the Commissioner (Appeals) had, while allowing the appeal filed by the Assessee, referred to the RG-1 register as well as RT-1 returns and rendered a finding that the utilization of the pouches shown in the loose papers tallied with the production figures shown in the RG-1 register as well as RT-12 return. The specific finding was that "each and every entry written for the receipt of pouches in the loose papers is duly correlated with purchase invoice issued by raw material supplier." However, during the pendency of the appeal before the CESTAT, the original records were unable to be produced by the Department. In the circumstances, by its order dated 5th October, 2015 this Court directed the Revenue to produce before it the original records and also file an affidavit in that regard.

Pursuant to the above order Mr. Surender Malik, Assistant Commissioner (Anti Evasion) has filed an affidavit. He states that "the case file bearing C. No. IV (Hq. Prev.) 15/58/2001 in the above matter is not traceable." He further states that "the department has already issued tracer dated 12th November, 2014 for tracing the file" and that despite all efforts "the concerned file has not been traced yet." He also adds that the appeal was filed by the Revenue before the CESTAT in the year 2006 and when the matter was listed before the CESTAT "even at that point of time the RG-1 register was not traceable to produce before the CESTAT under directions given by the CESTAT."

The Court is of the view that the CESTAT was required to examine the effect of non-production by the Department of the original records such as RG-1 registers and the RT-1 returns particularly considering that the findings rendered by the Commissioner (Appeals) in favour of the Assessee was on the basis of the said original records.

Consequently, the Court sets aside the impugned order dated 30th March, 2015 of the CESTAT and restores Appeal No. 2198/2006-EX (DB) for a decision afresh. The CESTAT will first address the question framed above viz., what is the effect of non-production by the Department of the original records of the case which have been relied upon by the appellate authority in rendering a finding in favour of the Assessee? The aforesaid Appeal No. 2198/2006-EX (DB) shall be listed before the CESTAT on 7th December, 2015 for directions. The present appeal and the pending application are disposed of in the above terms. Order Dasti to the parties.