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Judgment
Dr.D.Y. Chandrachud, J.—These Appeals u/s 35G of the Central Excise Act 1944 are directed against a common order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dated 28 February 2011 on an application for waiver of pre-deposit.
The CESTAT had before it a batch of matters in which the allegation is that the assessees, who manufacture and sell M.S. ingots, had clandestinely cleared manufactured goods by suppressing the actual production. In each of the cases a notice to show cause was issued to the assessees. The main demands for duty, as the Tribunal noted, were by and large based on the consumption of electricity which was found to have been suppressed by the parties. The demand for duty was based on the consumption of electricity in the manufacture of one Ton of M.S ingots, a norm of consumption being applied. Upon adjudication, differing amounts of duty and penalty were demanded in all the six cases.
Counsel appearing on behalf of the Appellants has placed on the record a chart inter alia containing the dates of the notices to show cause; the period to which the notices relate, the demand for duty and penalty, the dates of the orders in original and of the CESTAT and the deposit ordered by the Tribunal. For the convenience of reference we would reproduce the chart herein below:
SHIVA
SHIVA
SHIVA
ORANGE
SHRIDHAR
TRIMUTRH
60/2011
71/2011
72/2011
59/2011
64/2011
63/2011
SCN date:
9.6.2008
50 SCN''s
9.9.2009
9.1.2009
3.3.2008
7.10.2009
Period
May 2003 to Sept. 2007
Oct. 2007 to July 2008
Aug. 2008 to July 2009
16.12.2003 to 17.10.2005 925 units/PMT
18.10.2005 to 24.11.2008 -860 units/PMT
10.1.2003 to 15.11.2007
1.9.2008 to 1.9.2009
Duty
7.99 crs
1.97 crs
2.02 crs
11.51 crs
2.65 crs
1.01 crs
Penalty
7.99 crs
1.97 crs
2.02 crs
11.51 crs
2.65 crs
1.01 crs
0.80 crs (on director)
0.50 crs (on director)
0.50 crs (on director)
0.96 crs (on director)
0.20 crs (on director)
0.50 crs (on director)
0.10 crs (on director)
Order-in- Original
1.6.2009
1.10.2009
31.12.2009
1.6.2009
31.12.2008
26.2.2010
OIA
-
30.9.2010
-
-
-
-
CESTAT Order date & no.
28.2.2011
11.7.2011
11.7.2011
28.2.2011
28.2.2011
8.7.2011
CESTAT Ordered
50% duty & 25% penalty
50% Duty & 0.10 crs penalty on director
50% Duty & 0.10 crs penalty on director
50% duty & 25% penalty
50% duty & 25% penalty
0.125 crs on the basis of following Bom. HCorder in Trimurti�sow case.
The Tribunal by its common order has directed the deposit of an amount of 50% of the duty and 25% of the penalty imposed. In one of the cases, a different order was passed.
The orders of the Tribunal were challenged by one assessee before the Aurangabad Bench of this Court. A Division Bench of this Court at Aurangabad (consisting of Smt. Nishita Mhatre and M.T. Joshi, JJ.) delivered a judgment on 20 July 2011. We extract in extensor the judgment of the Aurangabad Bench herein below :
Admit. By consent, the appeal is heard finally forthwith. The appeal has been preferred by the original assessee against the judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal ( "CESTAT" for short), Mumbai, dated 28.2.2011, on an application for an interim relief. The CESTAT has directed the assessee to deposit 50 per cent of the amount of duty demanded along with 25 per cent of the penalty imposed, within four weeks from the date of receipt of the said order. In the event the assessee complied with the order, there would b e waiver of condition of pre-deposit and stay to the recovery of balance amount of duty and penalty.
Mr. Godsay, the learned Advocate for the appellant has pointed out several decisions of the CESTAT, wherein, the CESTAT has granted full waiver of the deposit, as an interim relief, where the facts are similar to the present case. These decisions have been rendered in 2011 (263) ELT 606 and Mithulal Gupta Bhavshakti Steelmines Pvt. Ltd. v. Commissioner of Central Excise and Customs, Nasik, [Appeal Nos. E 676 and 677 of 2009, with Stay Applications No.E/Stay-977 and 978 of 2009].
The learned Advocate for the appellant further pointed out that the Division Bench of this Court in Wardha Coal Transport Pvt. Ltd. Vs. Union of India (UOI), , has observed that once the Tribunal has granted full waiver in similar cases, it would not be proper to take a different view and deny waiver of pre-deposit. According to Mr. Godsay, the Division Bench has not denied the waiver of pre- deposit and, in stead, has directed the Tribunal to decide the appeal in accordance with law. He, therefore, contends that the matter ought to be remanded to the Tribunal to decide it afresh, after considering the aforesaid orders.
We have heard the learned counsel for the respondent who has submitted that no substantial question of law has been raised by the appellant and that the CESTAT has not committed any error in directing the appellant to deposit a part of the duty and penalty.
In our view, the matter deserves to be remanded to the Tribunal, as the Tribunal should take a consistent view regarding pre-deposit when the facts and circumstances in the matters before it are similar. Accordingly, the matter is remanded to the Tribunal. The Tribunal will take into consideration its earlier orders in Nasik Strips Pvt. Ltd. and Mithulal Gupta Bhavshakti Steelmines Pvt. Ltd. (supra) while deciding whether the appellant herein is entitled to waiver of pre-deposit. The appellant to appear before the Tribunal on 22.8.2011.
The Appeal is allowed, accordingly. No Orders as to costs. Civil Application stands disposed of.
Counsel appearing on behalf of the Appellants has submitted that this Court may pass a similar order, in terms of the order passed by the Division Bench at Aurangabad on 20 July 2011, remanding the proceedings back to the Tribunal. On the other hand, it was urged on behalf of the Revenue that - (i) The order of the CESTAT in 2011 (263) ELT 606 and Mithulal Gupta Bhavshakti Steelmines Pvt. Ltd. v. Commissioner of Central Excise and Customs, Nasik Appeal Nos. E 676 and 677 of 2009, with Stay Applications No.E/Stay-977 and 978 of 2009, is distinguishable; (ii) Before the CESTAT reliance was placed on the judgment of the Supreme Court in M/s. Triveni Rubber and Plastics Vs. Collector of Central Excise, Cochin, wherein a demand of duty arrived at by assessing the normal production on the basis of the electricity consumption was upheld by the Supreme Court after examining the provisions of Rule 173-E of the Central Excise Rules 1944.
We have considered the judgment of the Aurangabad Bench dated 20 July 2011. Before the Aurangabad Bench counsel for the assessee had pointed out certain decisions of the CESTAT where full waiver of deposit had been granted and it was his contention that the facts were similar. Moreover, it was sought to be urged that this Court has laid down that once the Tribunal has granted a full waiver in similar cases, it would not be proper to take a different view in other cases. The Division Bench merely held that the matter deserves to be remanded back to the Tribunal "as the Tribunal should take a consistent view regarding pre-deposit when the facts and circumstances in the matters before it are similar. " The Tribunal was directed to take into consideration its earlier order in Nasik Strips Pvt. Ltd. and Mithulal Gupta Bhavshakti Steelmines Pvt. Ltd. (supra).
With respect, we are unable to agree with the judgment of the Division Bench at Aurangabad dated 20 July 2011 in SRJ Peety Steels Pvt. Ltd. v. Union of India (First Appeal 706 of 2011 with C.A. 5013 of 2011). This is not a case where the Tribunal had not taken into account its earlier decision in Nasik Strips Pvt. Ltd. As a matter of fact, the Tribunal in the course of its impugned decision did refer to the earlier decision in Nasik Strips Pvt. Ltd., but observed as follows:
Again, the apex court''s order in M/s. Bhagwati Ispat case lends great support to the Revenue in the present batch of appeals. We may also point out that Bhagwati Ispat case was not brought to our notice when the stay order was passed on 9.7.2010 in the case of Nashik Strips Ltd. (supra).
The Division Bench of this Court has not come to any conclusion to the contrary. The order of the Division Bench does not contain any finding that the decision in Nasik Strips was on similar facts. All that the Division Bench recorded was the submission of counsel for the assessee. On that basis, without entering any finding, even prima facie, at this stage the Division Bench remanded the matter back to the Tribunal. Ordinarily in a matter such as the present, a Division Bench of this Court would be inclined to follow the view taken by a co-ordinate Bench particularly at the interim stage on an application for waiver of pre-deposit. We are, however, not inclined to do so for the reasons which we have indicated earlier. The Revenue implications for the Union Government are significant and as we have noted earlier in the table extracted herein above the total amount of duty in each of the cases is Rs.11.51 Crores, Rs.7.99 Crores, Rs.1.01 Crores, Rs.2.65 Crores, Rs1.97 Crores and Rs.2.02 Crores respectively. Penalties in the like amount have been demanded. Ordinarily, appeals against the decisions of the CESTAT are numbered in this Court not as First Appeals, but as Central Excise Appeals and are placed before the Tax Bench. We find ourselves unable to accept the view of the Division Bench at Aurangabad.
We accordingly formulate the following question which requires to be considered by a Larger Bench of this Court :
Whether the decision of the Division Bench in SRJ Peety. Steel Pvt. Ltd. v. Union of India (First Appeal 706 of 2011 with C.A. 5013 of 2011) delivered on 20 July 2011 remanding the proceedings back to the Tribunal requires reconsideration since the Division Bench did not express any view prima facie that the decision in Nasik Strips Pvt. Ltd. and Mithulal Gupta Bhavshakti Steelmines Pvt. Ltd. (supra). involved similar facts and particularly when (i) The Tribunal had distinguished the decision in Nasik Strips Pvt. Ltd. and (ii) The Tribunal had followed the decisions of the Supreme Court involving a similar issue of principle.
In view of the aforesaid order, we issue an ad interim protection to the effect that the Appeals before the Tribunal shall not be dismissed for want of compliance with the order of pre-deposit in the meantime.
Accordingly we direct the registry to place the papers of these Appeals before the Learned Chief Justice so as to enable His Lordship to pass such administrative directions as are considered appropriate and proper.