M/S STEEL AUTHORITY OF INDIA LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BOLPUR

M/S STEEL AUTHORITY OF INDIA LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BOLPUR

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



NON­REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION 
CIVIL APPEAL NO. 3611 OF 2015
M/S STEEL AUTHORITY OF INDIA LIMITED
          ...APPELLANT(S)
VERSUS
COMMISSIONER OF CENTRAL EXCISE, BOLPUR
    ...RESPONDENT(S)
J U D G M E N T
B.R. GAVAI, J.
1. The appeal challenges the order dated 12th November
2013 passed by the Division Bench of the High Court of
Calcutta, thereby dismissing the appeal being CEXA No. 23
of 2013 filed by the present appellant, which was in turn
filed, challenging the order dated 26th April 2013 passed by
the   Customs,   Excise   and   Service   Tax   Appellate   Tribunal,
East Regional Bench, Kolkata (hereinafter referred to as the
“CESTAT”), dismissing the application filed by the present
appellant seeking rectification of the order dated 30th October
2012 passed by the CESTAT.  The application was filed on
the ground that while passing the order dated 30th October
1
2012, the CESTAT did not notice the fact that the application
filed   by   the   present   appellant   was   pending   before   the
Committee of Disputes (for short “CoD”).
2. The appellant  is a  Public  Sector Undertaking  (for
short “PSU”) of the Government of India.  The appellant was
served with a Show Cause Notice dated 4th August 2005 by
the office of Commissioner of Central Excise by invoking the
extended period of limitation and proposing to demand duty
of Rs.15.66 crore in respect of the clearances made during
the period from July 2000 to December 2004.
3. As per the relevant procedure, the appellant, being a
PSU, was required to obtain the clearance from the CoD
before taking legal action against other PSUs or Departments
of the Government.  The CoD, in its Minutes of Meeting dated
2
nd  November 2006, granted permission to the Company to
pursue the appeal only on penalty aspect. As regards, the
duty aspect, the CoD held that in the CENVAT Regime, the
dispute was revenue neutral.
4. In   pursuance   of   the   permission   granted,   the
appellant filed an appeal being Appeal No. Ex.­396/2006,
2
before the CESTAT.  After hearing, the appeal was allowed by
the CESTAT setting aside the penalty vide order dated 11th
June, 2007.
5. It   is   the   contention   of   the   appellant   that   in   the
meanwhile, the authorities issued a series of letters directing
the appellant to deposit the duty amount.   As such, the
appellant deposited the duty demand of Rs.15.66 crore under
protest.
6. The   appellant,   thereafter   on   11th  February   2011,
filed   a   fresh   application   before   the   CoD,   requesting   for
permission to pursue the abovesaid appeal with respect to
duty aspect before the CESTAT.
7. This Court, subsequently, vide its judgment dated
17th February, 2011 in the case of Electronics Corporation
of India Limited v. Union of India and Others1
, held that
the mechanism which was sought to be invoked for getting
approval from the CoD, has outlived its utility.  This Court,
therefore, recalled the directions issued in the earlier orders
recorded in the cases of Oil and Natural Gas Commission
1 (2011) 3 SCC 404
3
and   Another   v.   Collector   of   Central   Excise2
,  Oil   and
Natural Gas Commission v. Collector of Central Excise3
and  Oil and Natural Gas Corporation Limited v. City &
Industrial   Development   Corporation,   Maharashtra
Limited and Others4
.
8. The   appellant,   thereafter,   moved   a   miscellaneous
application being Misc. Application No. MA(ROA) 507/2011
for restoration of the appeal being Appeal No. Ex.­396/2006,
which was dismissed by the CESTAT vide its order dated 11th
June 2007.  Vide the said order, the CESTAT had maintained
the appeal with regard to the penalty aspect and dismissed
the appeal with regard to duty demand as non­maintainable
for   want   of   clearance   from   the   CoD.     The   restoration
application was dismissed by CESTAT on 30th October, 2012.
Aggrieved thereby, the appellant approached the High Court.
The   High   Court,   vide   the   impugned   order,   dismissed   the
appeal.
9. We have heard Shri V. Sridharan, learned Senior
Counsel appearing on behalf of the appellant and Shri Arijit
2 1995 Supp (4) SCC 541 dated 11.10.1991
3 (2004) 6 SCC 437 dated 07.01.1994
4 (2007) 7 SCC 39 dated 20.07.2007
4
Prasad, learned Senior Counsel appearing on behalf of the
respondent.
10. Shri Sridharan submitted that the question whether
the appellant was liable to pay interest on the duty or not,
has not been considered by any authority.   He submitted
that the CoD, vide its Minutes of Meeting dated 2nd November
2006,   had   granted   liberty   only   to   challenge   the   penalty
aspect.     However,   subsequently   on   demand   made  by   the
authorities,   the   appellant   had   deposited   an   amount   of
Rs.15.66 crore.   Therefore, the question as to whether the
appellant was liable to pay interest on the duty is to be
considered.
11. Shri   Prasad,   on   the   contrary,   submitted   that   the
appellant had applied for refund and the said claim has been
rejected, which has attained finality. He, therefore, submitted
that the appellant cannot be permitted to reopen the said
issue.
12. We   find   that   the   facts   of   the   present   case   are
peculiar.  The second application was filed before the CoD on
11th February 2011.  In the meantime, the judgment of this
5
Court   in   the   case   of  Electronics   Corporation   of   India
Limited (supra) was delivered on 17th February 2011, which
has done away with the mechanism seeking permission of
CoD.  As such, the second application of the appellant could
not be considered by the CoD.   The question of interest,
therefore, has not been addressed by any of the authorities.
In   that   view   of   the   matter,   we   are   inclined   to   allow   the
appeal.
13. In the result, the appeal is allowed on the above
terms.     The   impugned   order   dated   12th  November   2013
passed by the High Court of Calcutta in CEXA No. 23 of 2013
is quashed and set aside.   The matter is remitted to the
CESTAT for consideration of the limited aspect of interest on
duty. No order as to costs.
14. Pending application(s), if any, shall stand disposed
of.  
…..….......................J.
[B.R. GAVAI]
.…….........................J.   
[HIMA KOHLI]
NEW DELHI;
JULY 28, 2022.
6

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