M/S Steel Authority Of India Ltd. vs Commissioner Of Central Excise

1. The appeal challenges the order dated 12 th 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 26 th 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 30 th October

2012 passed by the CESTAT. The application was filed on

the ground that while passing the order dated 30 th 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 4 th 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

2nd 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 11 th

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 Others 1, 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 Excise 2, 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 11 th

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 2 nd 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 12 th 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.

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