RATHI ISPAT LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Since all the four appeals by the assessee raise a similar issue, they have been heard together and would be disposed of by this judgment. The assessee manufactures stainless steel billets (S.S. Billets), S.S. Flats, steel castings and other alloy steel falling under Chapter Heading No. 72 of the Central Excise Tariff Act, 1985. On the basis of intelligence information that the assessee was indulging in a suppression of production and clandestine clearance of S.S. Billets/flats by showing excessive consumption of Chromium for the purpose of evading Central Excise Duty, a search took place at the premises of the assessee and of the residential premises. During the course of the search, samples were drawn and were sent to the National Metallurgical Laboratory, Jamshedpur for testing to determine the percentage of Chromium. A test report was obtained. During the course of an investigation, statements of the representatives of the assessee were recorded. During the course of the investigation, it was brought to the notice of the department that the assessee had earned a huge amount by way of commission namely Rs. 21.19 crores during 1996-97. Several transactions in connection therewith were examined. Eventually, a notice to show cause was issued to the assessee on 21 March, 2000 alleging that during the period December 1995 to January 1999 the assessee had clandestinely cleared 5871.17 metric tons of S.S. Flats valued at Rs. 17.80 crores, on which Central Excise Duty of Rs. 2.67 crores was evaded. The extended period of limitation was invoked under Section 11A(1) of the Central Excise Act, 1944. By an order of adjudication of the Commissioner of Central Excise (the Adjudicating Authority) dated 29 March 2007, the duty demand of Rs. 2.67 crores was confirmed, besides which a penalty of Rs. 3.41 crores was imposed on the assessee and a penalty of Rs. 50 lacs on its Director.

(2.) The assessee filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal) together with an application for waiver of pre-deposit. By an order dated 6 January 2009 the Tribunal directed the assessee to deposit an amount of Rs. 40 lacs as against the duty demand of Rs. 2.67 crores in two equal installments each of Rs. 20 lacs to be paid by 5 February 2009 and 20 March 2009. Subject to the aforesaid deposit, the balance was stayed. The Tribunal granted a dispensation in respect of the deposit of the penalty.

(3.) The assessee challenged the order of the Tribunal before this Court in Central Excise Appeal No. 44 of 2009 (M/s. Rathi Ispat Ltd., Ghaziabad v. Customs, Excise & Service Tax Appellate Tribunal, New Delhi & Anr.). At the hearing of the appeal, the learned Counsel appearing on behalf of the assessee raised a submission on the ground of financial hardship stating that the assessee had invoked the jurisdiction of the Board for Industrial and Financial Reconstruction (BIFR). A Division Bench of this Court by an order dated 17 April 2009 observed that since the Tribunal had deferred the date of compliance till 5 May 2009 in view of the pendency of the appeal, it was open to the assessee to take such a plea before the Tribunal. The Division Bench, therefore, did not consider it necessary to interfere with the order of the Tribunal at that stage and observed that the order would be effective subject to the decision, if any, on the application of the assessee before the Tribunal on the date of compliance.