2014 (1) TMI 1645 - AT - Central Excise

Modification of order - Whether the previous Orders-in-Original in case of M/s. Natani Rolling Mills Pvt. Ltd. and in case of Shiv Prasad Rolling Mills Pvt. Ltd., passed by the Commissioner of Central Excise, Jaipur by which he dropped the duty demands against them can be the basis for modification of the stay order dated 23-10-2013 passed in the case against the appellant company and its Director - Held that - Just because the Commissioner in December, 2012 in cases of M/s. Natani Rolling Mills Pvt. Ltd. and M/s. Shiv Prasad Rolling Mills Pvt. Ltd. has dropped the proceedings against them, this cannot be the justification for modification of the stay order dated 23-10-2012, as it is not known as to whether the facts of the case against the appellants and the facts of the cases against M/s. Natani Rolling Mills Pvt. Ltd. and M/s. Shiv Prasad Rolling Mills Pvt. Ltd. are identical Though the impugned Order-in-Original in case of the Appellant company and the Orders-in-Original in the cases against M/s. Natani Rolling Mills and M/s. Shiv Prasad Rolling Mills have been passed by the same Commissioner i.e. CCE, Jaipur-I, it is not known as to whether the facts of the case against the Appellant Company and the facts of the cases against M/s. Natani Rolling Mills and M/s. Shiv Prasad Rolling Mills are identical, as it is not known as to whether the fact of unexplained wide fluctuation in power consumption per MT from month to month - there in the cases against M/s. Natani Rolling Mills and M/s. Shiv Prasad Rolling Mills, which have been dropped by the Commissioner. In any case, the Commissioner s orders in the cases against M/s. Natani Rolling Mills and M/s. Shiv Prasad Mills have been challenged by the Department before the Tribunal and the Commissioner findings on the points of facts and points of law involved in these cases cannot be said to be final. The dropping of cases by the Commissioner against M/s. Natani Rolling Mills and M/s. Shiv Prasad Rolling Mills are not the developments which change the balance of convenience, as, as explained in para 24 above, the facts of the present case may not be identical to the facts of the cases against M/s. Natani Rolling Mills and M/s. Shiv Prasad Rolling Mills, and even if the facts are identical, it cannot be said at this stage that the Commissioner s orders dropping the proceedings against M/s. Natani Rolling Mills and M/s. Shiv Prasad Rolling Mills are correct. Thus the judgment of Hon ble Bombay High Court in case of M/s. Sarla Performance Fibers (2008 (2) TMI 68 - HIGH COURT BOMBAY) is not applicable for the facts of this case. - Modification denied.

Summary

Issues Involved:
1. Modification of Stay Order.
2. Clandestine manufacture and clearance of goods.
3. Basis of duty demand on electricity consumption.
4. Power of Tribunal to review its own orders.
5. Inconsistent stand by the Commissioner in similar cases.

Issue-wise Detailed Analysis:

1. Modification of Stay Order:
The applicants sought modification of the Stay Order Nos. 1780-1781/2012-EX, dated 23-10-2012, which directed M/s. Barijoriwala Rolling Mills Pvt. Ltd. to deposit 25% of the duty demand and Shri Lakhan Goyal, director, to deposit Rs. 2 lakh towards penalty as a condition for hearing their appeal. The modification was requested on the grounds that the Commissioner of Central Excise, Jaipur, had subsequently dropped the show cause notices issued to other assessees based on the same cause of action and evidence.

2. Clandestine Manufacture and Clearance of Goods:
The Revenue conducted a search on the premises of M/s. Nirmal Inductomelt Pvt. Ltd. and recovered incriminating documents indicating that M.S. ingots were cleared to various units, including the appellant, without proper accounting. The entries of ingots in the appellant's records were less than the quantity shown to have been supplied, leading to the conclusion that the appellant was involved in the clandestine manufacture and clearance of final products, resulting in a confirmed duty of Rs. 1,26,067.

3. Basis of Duty Demand on Electricity Consumption:
A significant portion of the duty demand, amounting to Rs. 2,79,34,347, was based on the consumption of electricity. The Revenue's investigation in the factory of M/s. Shree Sharma Steel Re-rolling Mills Pvt. Ltd. found that the average power consumption for manufacturing similar products was 102.09 units of electricity per MT. Applying this ratio to the appellant, the Revenue concluded that the appellant had underreported production, leading to the confirmation of the demand.

4. Power of Tribunal to Review its Own Orders:
The Tribunal discussed whether it had the power to modify its own stay order based on subsequent developments. The Judicial Member argued for modification, citing the Commissioner's subsequent orders dropping demands in similar cases. However, the Technical Member opposed, stating that the Tribunal becomes functus officio after passing an order and cannot review it without specific statutory power. The Tribunal ultimately rejected the modification application, emphasizing the lack of inherent power to review its orders.

5. Inconsistent Stand by the Commissioner in Similar Cases:
The appellants argued that the Commissioner had dropped duty demands in similar cases involving M/s. Natani Rolling Mills Pvt. Ltd. and M/s. Shiv Prasad Rolling Mills Pvt. Ltd., which were based on the same set of facts and evidence. However, the Tribunal noted that the facts of the present case might not be identical to those cases, and the Commissioner's orders in those cases were under appeal and not final. Therefore, the Tribunal concluded that the Commissioner's inconsistent stand could not justify modifying the stay order.

Conclusion:
The Tribunal, by majority, rejected the miscellaneous applications for modification of the stay order, emphasizing the lack of power to review its own orders and the need for consistency in judicial decisions. The Tribunal found that the evidence and circumstances in the present case warranted the original stay order, and subsequent developments in other cases did not justify a modification.