Commissioner Of Central Excise , Bolpur vs. M/S. Steel Authority Of INDIA Limited

Held

The Court held that the Tribunal had rightly granted relief to the respondent. The Court found that the original adjudication order was a non-speaking order, as it failed to address SAIL's contention that the 'new plant' did not belong to them and that they were not the manufacturers of granulated slag from that plant. The Tribunal had correctly noted that the demand was based solely on the difference between the Annual Operational Statistical Report and the ER-1 returns, with no independent evidence of removal of goods from SAIL's factory. SAIL had provided evidence of an agreement with M/s. ACC, DCSL, which operated a separate slag granulation plant on leased land within SAIL's premises and paid excise duty on its clearances. The Tribunal also noted that molten slag cleared by SAIL to M/s. ACC, DCSL was exempted under Notification 4 of 2006. The Court agreed with the Tribunal's finding that the Annual Dispatch Summary was not a statutory document and that duty had been paid by M/s. ACC, DCSL. Therefore, no question of law arose for consideration, and the appeal was dismissed.

Facts

The Commissioner of Central Excise, Bolpur (now Commissioner of CGST and Central Excise) filed an appeal against an order of the Customs, Excise and Service Tax Appellate Tribunal (Tribunal) dated May 17, 2018, which had allowed an appeal of M/s. Steel Authority of India Limited (SAIL). The appeal was filed with a delay of 1031 days. The original adjudication order dated March 11, 2010, had confirmed a demand of central excise duty, interest, and penalty amounting to Rs. 3,95,75,201.00 against SAIL. The revenue's case was that SAIL had suppressed the actual quantum of granulated slag cleared from a 'new plant' in its ER-1 returns, thereby evading duty. SAIL contended that the 'new plant' belonged to M/s. ACC, DCSL, a separate entity that purchased molten slag from SAIL and cleared granulated slag on payment of duty.

Key Issues

1. Whether the Tribunal was right in allowing the assessee's appeal without appreciating that the Annual Dispatch Summary, an authorized official record, could be the basis for demanding central excise duty, interest, and penalty under Section 11A(2), 11AB, and 11AC of the Central Excise Act, 1944. 2. Whether the Tribunal committed an error in not appreciating that when the respondent failed to produce documents proving M/s. ACC, DCSL is a subsidiary, the inclusion of its clearance figures in the respondent's Annual Dispatch Summary could not be accepted. 3. Whether the Tribunal was justified in allowing the assessee's appeal without considering the provisions of Rules 4, 6, and 8 of the Central Excise Rules, 2002. 4. Whether the decisions in Oudh Sugar Mills Ltd. vs. UOI and Centurian Laboratories vs. CCE relied upon by the Tribunal were applicable. Petitioner's (Revenue's) Arguments: The revenue argued that the Annual Dispatch Summary, being an official record, should form the basis for duty demand. They also contended that the respondent failed to prove M/s. ACC, DCSL was a separate entity, making its clearance figures relevant to the respondent's returns. The revenue further argued that Rules 4, 6, and 8 of the Central Excise Rules, 2002, were not considered by the Tribunal, and the precedents relied upon were not applicable. Respondent's (SAIL's) Arguments: SAIL contended that the 'new plant' was operated by M/s. ACC, DCSL, a separate entity that leased land from SAIL and manufactured granulated slag, paying duty on its clearances. SAIL explained that the Annual Dispatch Summary was for internal management and accounting purposes, differentiating between clearances from its 'old plant' and the 'new plant' of DCSL. They asserted that the demand was based solely on a discrepancy between two statements and that duty was paid by DCSL.