Indira Banerjee, J. - (1.) In this writ application the petitioner has challenged a Final Order No. F -282/CE/11 -SC(KB), dated 23rd September, 2011, passed by the Customs and Excise Settlement Commission, Additional Bench, Kolkata, to the extent the same purports to levy penalty of Rs. 4 crores on the petitioner No. 1 and Rs. 5 lakhs each upon the petitioner Nos. 2, 3, 4 and 5 and also an appropriation order dated 2nd November, 2011 issued by the Commissioner of Central Excise, Customs and Service Tax, ordering appropriation of the amounts paid by the noticee as specified in the said order. The petitioner -company, Vedanta Aluminium Limited, hereinafter referred to as Vedanta, carries on business inter alia of manufacture and sale of calcined alumina, falling under Chapter Heading 2818.20 of the First Schedule to the Central Excise Tariff Act, 1985.
(2.) Alumina manufactured by Vedanta are excisable goods and liable to payment of Central Excise Duty under Sec. 4 of the Central Excise Act, 1944 read with Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, hereinafter referred to as 'the 2000 Valuation Rules'.
(3.) In 2006 -2007 Vedanta commissioned a unit for manufacture of inter alia calcined alumina. Vedanta manufactured calcined alumina from raw materials procured from suppliers including Bharat Aluminium Co. Ltd., hereinafter referred to as BALCO for its own captive use at its unit at Jharsuguda and also for outright sale, including outright sale to BALCO. Vedanta also manufactured alumina as job worker and/or conversion agent for conversion charges. Bauxite supplied by BALCO to Vedanta free of charge was processed and converted into alumina and supplied to BALCO against conversion charges.;