2021 (2) TMI 408 - HC - Central Excise

Entitlement of the appellant to credit of additional duty of customs, education cess, secondary and higher education cess and special duty of customs paid on polyurethane resin for payment of CENVAT duty - Process amounting to manufacture or not - HELD THAT - Since the related appeal is of the year 2013, it would be just and proper to hear the appeal at an early date. Moreover, though the show cause notices may be post the decision of CESTAT which is being examined in the related appeal, those draw sustenance from the reasons recorded in the order of the CESTAT which is the subject matter of the related appeal. It would be in the interest of justice if the show cause notices are not proceeded further till we decide the related appeal - Application disposed off.

Summary

Issues:
Interim application for stay of show cause notices during appeal pendency.

Analysis:
The High Court of Bombay heard an interim application filed by the original appellant in Central Excise Appeal No.303 of 2013 seeking a stay on various show cause notices issued during the appeal's pendency. The related appeal was admitted by the court in 2014 based on substantial questions of law framed in the order. The main issue before the court pertained to the appellant's entitlement to credit of additional duty of customs, education cess, secondary and higher education cess, and special duty of customs paid on polyurethane resin for cenvat duty payment. The legality of the CESTAT's order, which held that the appellant's activity did not amount to manufacture, was also under consideration.

It was revealed that based on the CESTAT's findings on the aforementioned issues, five show cause notices were issued after the CESTAT's decision. The respondent's counsel mentioned that a total of seven show cause notices were issued, with the first two being covered by the related appeal, and the remaining five being post the CESTAT's decision. The court acknowledged that the show cause notices post the CESTAT's decision drew sustenance from the reasons recorded in the CESTAT's order, which was the subject matter of the related appeal.

After hearing both parties, the court deemed it just and proper to expedite the appeal's hearing, given its 2013 origin. The court also noted that the show cause notices, although issued post the CESTAT's decision, were linked to the CESTAT's order under scrutiny in the related appeal. Therefore, the court decided that it would be in the interest of justice to halt the proceedings on the show cause notices until the related appeal was decided. Consequently, the court listed the related appeal for hearing on a specific date and granted the interim application to restrain the respondents from further adjudicating the show cause notices until the final disposal of the petition. The interim application was then disposed of by the court.