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Vela Smelters Pvt. Ltd V/S CCE, Salem and Others.

    E/1 to 3/2010 (Arising out of Order-in-Original Nos. 78, 79/2009-CE (SLM) dated 05.10.2009, passed by the Commissioner of Central Excise (Appeals), Salem) and Final Order Nos. 42225-42227/2017

    Decided On, 26 September 2017

    At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai

    By, THE HONORABLE JUSTICE: SULEKHA BEEVI
    By, MEMBER AND THE HONORABLE JUSTICE: MADHU MOHAN DAMODHAR
    By, MEMBER

    For Petitioner: J. Shankarraman, Advocate And For Respondents: K.P. Muralidharan, AC (AR)



Judgment Text


1.1 The appellant is engaged in the manufacture and clearance of MS Ingots falling under Chapter 72061090 of the Central Excise Tariff Act, 1985. Pursuant to investigation by the DGCEI authorities on 14.6.2006, a show cause notice F. No. INV/DGCEI/CBERU/8/2008 dated 15.1.2008 was issued by the Additional Director, Directorate General of Central Excise Intelligence, Chennai, demanding Central Excise Duty of Rs. 28,18,945/- on the alleged unaccounted manufacture and clearance of MS ingots during the period from May 2006 and June 2006. The

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lower adjudicating authority (Additional Commissioner of Central Excise, Salem) had confirmed the demand with equal penalty and interest. Aggrieved by the above Order, the appellant filed Appeal before the Commissioner (Appeals), Salem and he made modifications to the Order of the lower authority and reduced the Duty demand to Rs. 12,36,267/- with penalty @ 25% under Section 11AC along with interest under Section 11AB vide Order-in-Appeal No. A. No. 78 & 79/2009 CE (SLM); [Sl. No. 129 & 130/2009 dated 05.10.2009 and Corrigendum to the Order-in-Appeal dated 05.10.2009.

1.2 That after the receipt of the above Order-in-Appeal, the entire allegation of clandestine removal has been negated by the department in the subsequent show cause notice bearing No. 59/2009 dated 27.10.2009 [page No. 237 of Volume 2] issued by the same Directorate General of Central Excise Intelligence, Chennai Zonal Unit for non-receipt of imported scrap into the factory for manufacture of ingots. In this notice, it is alleged that during the period 2005-2006 and 2006-07 the appellant had not received 6075.41 MT and 6914.49 MT respectively of scrap into the factory at all. This means that without receiving the raw materials the Appellant could not have manufactured even the alleged quantity of 474.895 MT of MS ingots as mentioned in the Order-in-Appeal during the said period over and above the accounted quantity as per ER-1. For arguments sake, if the allegation of non-receipt of raw material is right, even the accounted quantity could not have been manufactured by the appellant. Hence, there is no question of unaccounted quantity of 474.895 MT of ingots being manufactured and cleared to M/s. Pavai Alloys and Steels Pvt. Ltd., during the said period as confirmed by the Commissioner (Appeals). The said notice also emerges out of the investigation which started on 14.6.2006.

1.3 Against the above said show cause notice the appellant filed an application before the Settlement Commission, Chennai admitting an amount of Rs. 22,04,747 out of the demand of Rs. 1,64,43,413/-. The above admission was on the ground that they do not have the end use certificate to the above extent. The Settlement Commission vide Final Order No. 21/2012-CEx. dated 9.10.2012 had sent the matter to the Commissioner for adjudication.

1.4 The above said order was challenged by way of Writ Petition No. 30162 of 2012 before the Hon'ble High Court of Madras. In the meantime, the Commissioner of Central Excise, Salem passed Order No. 3/2014 dated 15.4.2014 demanding CENVAT credit of Rs. 1,43,43,413 and imposed equal amount of penalty. Aggrieved by the above order of the Commissioner, Writ Petition No. 15706 of 2014 was filed challenging the same. Writ Petition No. 30162 of 2012 was dismissed by the Hon'ble High Court vide its common order dated 26.11.2014. Writ Petition No. 15706 of 2014 was allowed and the matter was remanded to the original authority on the ground that it would have been fair and reasonable on the part of the Commissioner if the matter was kept in abeyance to await the outcome of the Writ Petition No. 30162 of 2012.

1.5 The appellant has filed Writ Appeal No. 358 of 2015 against Writ Petition No. 30162 of 2012 and the Hon'ble Division Bench vide its interim order dated 2.2.2017 has held that the petitioner is at liberty to move the court seeking for appropriate order, in the event, any advance order is passed pursuant to the show cause notice issued.

1.6 Hence the second show cause notice is pending adjudication and the outcome of the above Writ Appeal has a bearing on the present case pending before the CESTAT. Otherwise, it would lead to multiplicity of proceedings.

1.7 The Ld. Counsel submitted that in view of the above, the present appeals may please be heard after the W.A. is disposed of by the Hon'ble High Court.

2. The Ld. AR, Shri K.P. Muralidharan, AC, also submitted that the matter is pending before the Hon'ble High Court.

3. Both sides have not been able to submit when the matter is likely to be disposed by the Hon'ble High Court. The appeal is of the year 2010 and it has been pending before the Tribunal. Ahead of the transition of Indirect Tax to GST, this Tribunal has been given a mandate to dispose of all old cases. Viewed in this light, we are of the considered opinion that it would be appropriate and prudent to close the file for the purpose of statistics. We, however make it clear that the appeal along with stay order/interim orders, if any, will continue before the Tribunal and the matter is closed only for the purpose of statistics. Both sides are at liberty to file application before the Tribunal to reopen the matter as and when the case is disposed by the Hon'ble High Court or in case of any change of circumstance.

4. In the result, the appeal is disposed as file closed
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