2012 (11) TMI 605 - HC - Central Excise

Determination of Liability to pay Excise Duty - Following the decision of court in case of New Horizons Ltd. and Anr. vs. Union of India and Others, 1994 (11) TMI 203 - SUPREME COURT OF INDIA held that - Doctrine of lifting veil, piercing the veil, peeping or seeing through the veil is invoked when the corporate personality is found to be opposed to justice, convenience or interest of Revenue and agree with him that Courts come to rescue of Revenue where subterfuge to it is caused inside corporate veil. In the present case GTC was controlling KCPL and JKCL beginning from manufacture till marketing of the goods. Such finding alone was enough to hold that GTC had gained at the cost of Revenue controlling the MRP and realised sale proceeds over and above the MRP declared - appellant was duty bound to deposit the amount of excise duty determined by CESTAT within a period of three months from the 25.04.2011, if it was interested in pursuing the present appeals - Since the appellant has failed to do so, the inevitably result of such failure is the dismissal of these appeals - grievance cannot be gone into by this Court, since the entire controversy has been settled by the Supreme Court as is evident from the above extract - appeals are accordingly disposed of.

Summary

Issues:
- Liability determination between GTC Industries Ltd., KCPL, and JKCL
- Compliance with Supreme Court's order regarding pre-deposit of excise duty
- Interpretation of CESTAT's findings on corporate veil piercing

Liability Determination:
The judgment involves three appeals challenging CESTAT's decision holding M/s. GTC Industries Ltd. liable for manufacturing activities conducted by KCPL and JKCL. CESTAT attributed duty liability to KCPL and JKCL based on the manufacturing and marketing activities, emphasizing that ownership of goods is irrelevant for levy purposes. The Revenue contended that the liability should extend to GTC Industries Ltd. as well.

Compliance with Supreme Court Order:
The Supreme Court directed pre-deposit of excise duty, which the appellant company failed to fulfill within the specified timeframe. Despite depositing the penalty amount, the principal sum of Rs.3.85 crores remained unpaid. The Court noted the appellant's failure to comply with the order, leading to the dismissal of the appeals due to non-payment of the determined excise duty.

Interpretation of CESTAT's Findings:
The Supreme Court's order highlighted CESTAT's reliance on the doctrine of lifting the corporate veil to determine that GTC Industries Ltd. had benefitted at the expense of Revenue by controlling KCPL and JKCL throughout the manufacturing and marketing processes. The Court emphasized that the appellant's failure to deposit the excise duty amount determined by CESTAT within the specified period resulted in the dismissal of the appeals, as per the Court's previous order.

In conclusion, the judgment addresses the liability dispute between GTC Industries Ltd., KCPL, and JKCL, the non-compliance with the Supreme Court's order regarding excise duty pre-deposit, and the interpretation of CESTAT's findings on piercing the corporate veil. The dismissal of the appeals was based on the appellant's failure to fulfill the payment obligation within the stipulated timeframe, as directed by the Court, thereby settling the controversy as per the Supreme Court's decision.