2018 (1) TMI 767 - HC - Central Excise

Recovery of Excise duty - extended period of limitation - whether this Court should permit the petitioner to now challenge the Order-in-Original dated 10.01.2014 when the appeal filed against the said order stood dismissed though on a technical ground? - Held that - it appears due to the impugned proceedings under the Central Excise Act, the petitioner is now faced with proceedings under the Income Tax Act and the Tamil Nadu Value Added Tax Act and the matters are pending at various stages - though the Order-in-Original was passed in the year 2014, the Central Excise Department has not been able to recover a portion of the amount pending disposal of the appeal and the Department have been drawn into the litigation ever since 2014 onwards - with a view to protect the interest of Revenue and also to give an opportunity to the assessee to remedy the breach, this Court is inclined to issue appropriate directions. While rejecting the challenge to the impugned order, direction is issued to the petitioner to pay a sum of ₹ 75 lakhs on or before 16.02.2018 - petition disposed off.

Summary

Issues:
1. Show cause notice invoking extended period under Central Excise Act.
2. Rejection of objections by Commissioner and Order-in-Original.
3. Maintainability of writ petition due to non-compliance with CESTAT order.
4. Appeal to CESTAT, dismissal for non-compliance, and subsequent legal challenges.
5. Court's decision on challenging the Order-in-Original.
6. Directions issued by the Court regarding payment and further proceedings.

Analysis:
1. The petitioner, a Private Limited Company manufacturing M.S. Ingots, received a show cause notice under the Central Excise Act invoking the extended period of five years. The notice directed the petitioner to show cause for the recovery of central excise duty, interest, and penalty based on an Expert's report linking electricity consumption charges to production output.

2. The petitioner's objections to the show cause notice were rejected by the Commissioner, leading to the issuance of an Order-in-Original dated 10.01.2014, which was challenged in the writ petition before the High Court.

3. The Revenue's counsel opposed the writ petition's maintainability, citing the petitioner's failure to comply with the CESTAT order and subsequent legal proceedings up to the Supreme Court. The Revenue argued for dismissal of the writ petition with exemplary costs.

4. The petitioner had previously appealed to the CESTAT against the Order-in-Original and filed for waiver of pre-deposit, which was partially granted. However, due to non-compliance, the appeal was dismissed, leading to further legal challenges up to the Supreme Court, resulting in dismissal of the Special Leave Petition.

5. The High Court deliberated on whether to allow the petitioner to challenge the Order-in-Original after the appeal dismissal. Considering the impact of the excise proceedings on other tax matters and the Revenue's interest, the Court decided not to interfere with the Order-in-Original. The Court noted the technical ground for the appeal dismissal and granted the petitioner one opportunity to comply with the pre-deposit condition.

6. Consequently, the Court directed the petitioner to pay ?75 lakhs by a specified date, as part of the pre-deposit amount directed by the CESTAT. If the petitioner complies, they are granted liberty to file necessary applications before the Tribunal. Failure to meet the condition would result in automatic dismissal of the writ petition. The Court disposed of the Writ Petition without costs, closing connected Miscellaneous Petitions.