Commissioner Of Central Excise And Service Tax vs. M/S. S.C. Johnson Products Private Limited

Held

The Gauhati High Court held that the appeals were not maintainable before it. The Court found that Substantial Question of Law Nos. 1 and 3 were directly and proximately related to the determination of a question having a relation to the value of goods for the purpose of assessment. Citing the Supreme Court's decision in Commissioner of Customs, Bangalore-I vs. Motorola India Limited, which held that appeals relating to the determination of questions concerning the value of goods for assessment purposes lie directly to the Supreme Court and not the High Court, the Court concluded that it lacked jurisdiction. The Court also noted that the appellant had not produced the judgment cited in Substantial Question of Law No. 2, despite multiple listings. Consequently, the Court agreed with the reasoning of other High Courts that such issues attract Section 35G and 35L of the CEA, 1944, and therefore, the appeals could not be decided by the High Court. The appeals were dismissed on grounds of maintainability.

Facts

The Commissioner of Central Excise and Service Tax, Guwahati (now Principal Commissioner, CGST and Central Excise, Guwahati) filed two appeals before the Gauhati High Court against the common judgment and order of the CESTAT, Kolkata. The appeals concerned the eligibility of M/s S.C. Johnson Products Private Limited for a special rate of value addition for their manufactured products, 'Mosquito Repellents' and 'Cleaning Preparations', under Area Based Exemption granted by Notification No. 32/99-CE, as amended. The CESTAT had upheld the respondent's methodology of arriving at the sale value from audited financial statements by apportioning it to respective units based on stock transfer ratio, and had set aside the Commissioner's orders rejecting the respondent's application for fixation of a special rate. The Commissioner's contention was that separate applications were required for each unit, not a consolidated one.

Key Issues

1. Whether the Appellate Tribunal was legally correct in holding that the issue involved is whether the fixation of a special rate can be rejected merely because the sale value is arrived at from the audited financial statements of the company by appropriating the same to respective units on the basis of their stock transfer ratio. 2. Whether the Appellate Tribunal was legally correct in holding that the issue is no longer res integra, having been decided in the case of M/s Hindustan Unilever Ltd. V Commissioner of Central Excise & Service Tax, Dibrugarh. 3. Whether the Appellate Tribunal was legally correct in holding that the methodology for arriving at the sale value from the audited financial statements of the company by appropriating the same to the respective units on the basis of stock transfer ratio has been accepted and the special rate has been fixed accordingly. The appellants argued that separate applications were required for each unit, not a consolidated one, for availing exemption benefits. The respondents argued that separate applications had indeed been submitted and that the appeals were not maintainable under Section 35G of the Central Excise Act, 1944, as the issue related to the value of goods for assessment, which should be agitated before the Supreme Court under Section 35L of the CEA, 1944. They contended that Substantial Questions of Law 1 & 3 related to the quantum of exemption, attracting Sections 35G and 35L. Regarding Question 2, they had no comment without the judgment copy but noted that a coordinate bench's decision should be followed.