HIGH COURT OF HIMACHAL PRADESH SHIMLA Central Excise Appeal No. 7 of 2008 Date of decision: 24.11.2008 M/s Jai Ambey Containers Pvt. Ltd. Appellant Vs Union of India & others Respondents. Coram: The Hon’ble Mr. Justice R. B. Misra, Judge The Hon’ble Mr. Justice Surjit Singh Judge Whether approved for reporting?1 For the Appellant Mr. Dhruv Agarwal, Sr. Advocate with Mr. Nalin Talwar, Advocate and Mr. Ajay Kumar, Advocate. For the respondents Mr. Sandeep Sharma, Assistant Solicitor General of India. Per Surjit Singh J. (oral) This appeal, under Section 35-G of the Central Excise Act, 1944 has been filed by assessee M/s Jai Ambey Containers Pvt. Ltd., against the order dated 20.2.2008, passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi, Principal Bench, Court No. 1, in Excise Appeal No. 2380 of 2007, whereby the aforesaid appeal, which was filed by the appellant-assessee herein, has been rejected in limine, on the ground that the same is not maintainable, as the order of the Commissioner (Appeals) under challenge, was not appealable as it did not fall within the ambit of sub section (1) of Section 35-B. 1 Whether reporter of local papers is allowed to see the judgment? - 2 - Notices of the appeal were issued to the respondents. An application seeking interim relief had also been moved by the appellant. It was allowed and the operation of the order of the Commissioner (Appeals) was stayed. Having heard the learned counsel for the parties, we admit the appeal on the following substantial question of law:- “Whether the appeal filed by the appellant before the Customs Excise and Service Tax Appellate Tribunal, New Delhi was maintainable and hence the order of rejection of appeal in limine passed by the Tribunal is not sustainable ?. On being told by both the sides that they are prepared to address arguments on the aforesaid substantial question of law, we have finally heard the matter. Before dealing with the aforesaid question of law, we may notice the relevant facts. Appellant has set up an Industrial Unit in the Industrial area of Kala Amb for manufacture of certain items like corrugated paper, boxes etc. Since Kala Amb area falls within the State of Himachal Pradesh, certain special concessions and exemptions from taxation are available to the Industries set up in that area. On 10th June, 2003, Central Government issued a notification providing, inter alia, that a unit set up on or before 7th day of January, 2003 would be entitled to certain exemptions, in case such unit had undertaken, on or after 7th day of January, 2003, substantial expansion by way of increase in installed capacity - 3 - by not less than 25%. Appellant claimed benefit under the said notification claiming that he had added to the machinery already installed and because of that addition, installed capacity had increased by 55%. The Committee consisting of General Manager DIC, Nahan, Senior Scientist & Officer-in- Charge NRTC, Parwanoo and Manager DIC Nahan inspected the Industrial Unit of the appellant and gave a report that there had been expansion of existing plant and machinery as a result of which the value of plant and machinery had increased from Rs. 29.33 lacs to 45.38 lacs. Claim of the appellant for exemptions under the aforesaid notification was rejected by the Assistant Commissioner, vide order dated 1.12.2006. The said Assistant Commissioner, by reference to a circular order dated 21.1.2004, held that there had not been any addition to the plant or machinery and hence the appellant was not entitled to any exemption. Appellant filed an appeal before the Commissioner (Appeals). That appeal was also dismissed. The order of dismissal is dated 13th June, 2007. Appellant then filed an appeal before the aforesaid Tribunal. The Tribunal has observed that the appeal does not fall within the purview of sub section (1) of Section 35-B of the Central Excise Act, 1944. View taken by the learned Tribunal does not appear to be correct, on the face of it, because the order that has been passed by the Commissioner (Appeals) and which was challenged before the Tribunal itself reads that the same had been passed under Section 35-A of the Central Excise Act, 1944. Section 35-B (1) (b) of the Central Excise Act, - 4 - 1944 provides for appeal to the Tribunal against an order passed by the Commissioner (Appeals) under Section 35-A.. It has been conceded during the course of hearing that the order of the Commissioner (Appeals), which was challenged before the Appellate Tribunal, had been passed under Section 35-A of the Central Excise Act, 1944, though the learned counsel representing the Revenue side says that the Tribunal had the discretion, under Clause (i) of the second proviso of sub section (1) of Section 35-B to refuse to admit the appeal. The submission that the Tribunal had the discretion to refuse to admit an appeal under the aforesaid Clause (i) of second proviso has been noticed only to be rejected. The Tribunal has the discretion not to admit an appeal under the aforesaid clause (i) of second proviso where the difference in duty involved or the duty involved does not exceed rupees 50,000/-. In the present case, the question did not pertain to the amount of duty involved but it related to the interpretation of notification dated 10th June, 2003 in the context of the claim of the appellant that he having added to the machinery was entitled to the exemption granted under the aforesaid notification. The argument merits rejection on another count also. The Tribunal has nowhere mentioned that the appeal was not being admitted in exercise of the discretion vested in it, under second proviso to Section 33-B (1) of the Central Excise Act, 1944. In view of the above said position, we answer the aforesaid substantial question of law in the affirmative that is to say in favour of the assessee–appellant. - 5 - Consequently, the appeal is accepted, order of Customs Excise and Service Tax Appellate Tribunal, New Delhi is set aside and the case is remanded to the said Tribunal for deciding the same on merits. We have been told that an application for interim relief seeking stay of the operation of the order of the Commissioner (Appeals), had been presented along with the appeal to the appellate Tribunal. Pending disposal of such application by the Tribunal, we direct that the impugned order of the Commissioner (Appeals) shall not be enforced. The appeal is disposed of accordingly. (R.B. Misra), J 24th November, 2008 (Surjit Singh), J (cm)