1990 (8) TMI 249 - AT - Central Excise

Summary

Issues:
1. Levy of duty on electricity consumption.
2. Application of formula for calculating duty on electricity.
3. Relevance of Central Board of Excise & Customs' orders.
4. Compliance with High Court's directions for calculating liability on a monthly basis.

Detailed Analysis:

Issue 1: Levy of duty on electricity consumption
The case involved M/s. Tata Iron & Steel Co. Ltd., engaged in the manufacture of iron and steel, including electricity generation for internal and public consumption. The Central Excise Department alleged incorrect duty payment by the appellants due to the mixing of self-generated electricity with that purchased from Damodar Valley Corporation (DVC). The Collector's order necessitated duty payment on electricity used for non-industrial purposes, leading to a reduced demand after appeal.

Issue 2: Application of formula for calculating duty on electricity
The High Court addressed the formula proposed by the Collector, directing deduction of energy supplied to associated companies before apportioning duty between self-generated and DVC-supplied electricity. The Court ordered a monthly calculation based on the total energy mix to determine duty liability, emphasizing a balanced approach to avoid discrimination.

Issue 3: Relevance of Central Board of Excise & Customs' orders
The appellants cited orders from the Central Board of Excise & Customs in similar cases, suggesting duty liability only when internal consumption falls below self-generation levels. However, the Collector dismissed these orders, asserting the High Court's binding authority over subordinate decisions, leading to the current appeal.

Issue 4: Compliance with High Court's directions for calculating liability on a monthly basis
The Appellate Tribunal deliberated on three possible approaches for duty calculation, including the High Court's directive to consider monthly energy consumption and associated company deductions. Despite the appellants' grievances regarding total DVC supply inclusion and lack of monthwise calculations, the Tribunal upheld the High Court's order as binding, directing the Collector to reassess duty based on the prescribed formula and monthly analysis.

In conclusion, the Appellate Tribunal disposed of the appeal, instructing the Collector to adhere to the High Court's formula for duty calculation, ensuring compliance with monthly assessments and providing the appellants with an opportunity to address any discrepancies in the revised demand.