S. Vaidyanathan, J. - (1.) This Writ petition has been filed, praying for the issuance of Writ of Certiorari, to call for the records relating to the impugned show cause notice, issued by the 2nd respondent in SCN.Sl. No. 12/2014 (C.Ex) (Commr) dated 21.03.2014 (C. No. V/26/15/2/2014 -C.Ex.ADJ) and quash the same as without authority of law, contrary to the scope and objective of Central Excise law and barred by limitation.
(2.) The petitioner is one of the various Thermal Stations of TANGEDCO. TANGEDCO is a Public Sector Undertaking owned by the Government of Tamilnadu, engaged in the generation and distribution of electricity and manufacturer of 'Fly Ash' and 'Fly Ash Bricks' falling under Chapter sub heading 26219000 and 68159910 respectively, of the Central Excise Tariff Act, (CETA) 1985. The petitioner is aggrieved by the impugned show cause notice dated 21.03.2014, in and by which, the second respondent has stated that the petitioner has contravened the provisions of Rule 4,6,8 to 12 of Central Excise Rules, 2002 (in short, the Rules) since it had cleared 'Fly Ash' and 'Fly Ash Bricks' without payment of appropriate Excise duty, without taking Central Excise registration, without filing statutory monthly returns and without following the prescribed procedure. Therefore, CENVAT duty of Rs. 1,40,70,803/ - including Education cess and Secondary Higher Education cess has been demanded under erstwhile Sec. 11A(1) / Sec. 11A(5) of Central Excise of the Act 1944 (in short, the Act) for the clearance of 'Fly Ash' and further CENVAT duty of Rs. 1,85,443/ -, including Education and Secondary Higher Education cess has been demanded for clearance of 'Fly Ash Bricks'. Apart from this, the respondent has also demanded interest and also proposed to impose penalty under the Rules. Challenging the same, the petitioner has come forward with the present Writ Petition.
(3.) A counter affidavit has been filed on behalf respondents, inter alia, it is stated that during the process of production of electricity, 'Fly Ash' emerges as by -product and generated during the burning of pulverized coal for power generation, which is marketable and has also an intrinsic value in the commercial market. The petitioner is engaged in manufacture of 'Fly Ash Bricks'. 'Fly Ash' is a fine powder recovered from the gases of burning coal during the production of electricity. It is used as input in the manufacture of various commodities such as cement, asbestos sheet, bricks etc. The end -users themselves create infrastructure for collection of 'Fly Ash' and take delivery of 'Fly Ash' from the 'Fly Ash' extractions system placed/ installed by them at the factory premises of the petitioner. The 'Fly Ash' collection system installed at the premises of the petitioner is subject to the condition for the cement companies have to pay charges for 'Fly Ash' at the rate charged by the Tamilnadu Electricity Board (TNEB). 100% of the 'Fly Ash' schedule should be collected by the company from the allotted unit, out of which 20% of 'Fly Ash' should be spared to TNEB for allotting the same to other industries. The 'Fly Ash' is cleared to various customers such as cement plants, 'Fly Ash Bricks' manufactures etc, on collection of charges which is shown as revenue realized as per their worksheet. It is stated that 'Fly Ash' falls under chapter sub heading 26219000 of the Act, is a marketable and excisable commodity and remained exempted from payment of duty till 28.02.2011 vide notification No. 76/86 CE dated 10.02.1986, which was superseded by another notification No. 17/2011 CE dated 01.03.2011. Later, duty at the rate of 1% was imposed on 'Fly Ash' vide notification No. 01/2011 -CE dated 01.03.2011 subject to the conditions that CENVAT credit is not availed by the manufacturer of 'Fly Ash'. Further, duty was increased 1% to 2% vide notification No. 16/2012 CE with effect from 17.03.2012. Notification No. 2/2011 - CE dated 01.03.2011 prescribes a duty at the rate of 5% on 'Fly Ash' with CENVAT credit facility, which was increased to 6% from 17.03.2012 by notification dated 17.03.2012. The petitioner is not availing CENVAT credit facility, it is liable to pay CENVAT duty at 1% from 01.03.2011 to 16.03.2012 and 2% from 17.03.2012 onwards, on the value of 'Fly Ash' cleared. The product, 'Fly Ash Bricks', is excisable goods classified under chapter 68159910 of the Act and effective rate of excise duty was applicable on such goods cleared. It attracts duty at 8% from February 2009 to 2010, 10% from March 2010 to 16th March 2012 and 12% from 17th March 2012. Since 'Fly Ash' finds a place in the Central Excise Tariff, the petitioner is liable to pay Central Excise duty on the 'Fly Ash' clearances from 01.03.2011.;