M/S STEEL AUTHORITY OF INDIA LTD. vs. COMMISSIONER OF CENTRAL EXCISE

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 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 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