CEA No. 51 of 2010 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CEA No. 51 of 2010 Date of Decision: 5.7.2010 M/s Singla Steel Pvt. Ltd. ....Appellant. Versus Commissioner of Central Excise-I ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Radhika Suri, Advocate for the appellant. None for the respondent. AJAY KUMAR MITTAL, J. 1. This order shall dispose of two appeals bearing CEA Nos. 51 and 52 of 2010. The facts are being taken from CEA No. 51 of 2010. 2. This appeal has been filed by the assessee under Section 35 (G) of the Central Excise Act, 1944 (in short “the Act”) against the order dated 1.7.2009 passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi (hereinafter referred to as “the Tribunal”) in Excise Appeal No. 5672 of 2004 (Annexure P-1) claiming that the following substantial questions of law arise in these appeals for determination by this Court:- “i) Whether in the facts and circumstances of the case, the Tribunal had failed to consider whether any infraction of Rule 3A and Rule 96ZP was made out and had erroneously CEA No. 51 of 2010 -2- adjudicated the matter placing reliance solely on the ratio of this Hon'ble Court in Shri Bhagwati Steel Rolling Mills vs. Commissioner of Customs Excise, Chandigarh? ii) Whether in facts and circumstances of the case, the Tribunal was correct in attributing higher annual capacity of 3 M.T. and 4 M.T. only on the basis of spare crucibles installed by the Appellants contrary to Rules 3 and 4 of the Induction Furnace Annual Capacity Determination Rules, 1997? iii) Whether in the facts and circumstances of the case (in the absence of fraud, collusion, willful mis-statement and suppression of facts on the part of the Appellants), the Tribunal failed to consider whether the extended period of limitation under Section 11A was neither justifiable nor available to the Department especially since the capacity had been determined by the Commissioner himself vide order dated 4.2.1998 which was verified by the Range Officer Central Excise Range, Kharar and the Appellants had further revealed vide letter dated 21.8.1997 that it had spare crucible of 4 M.T.? iv) Whether in the facts and circumstances of the CEA No. 51 of 2010 -3- case the order passed by the Tribunal is perverse as it suffers from non application of mind as no pleas or evidence referred to in the grounds of appeal were discussed or disproved in the impugned order? v) Whether in the facts and circumstances of the case the order passed by the Tribunal is in gross violation of the principles of natural justice and audi alterem partem being contrary to the ratio of the Apex Court in the case of Union Carbide Vs. Union of India, AIR 1992 SC 298 and is contrary to its own decision in Burdwan Iron & Steel Co. (P) Ltd. Vs. CCE, Bholpur-2002 (149) E.L.T. 1134 (TRI-KOLKAT) and Pooja Castings Pvt. Ltd. Vs. CCE, Jaipur-I, 2004 (163) E.L.T. 356 (TRI. DELHI)?” 3. Briefly stated, the facts of the case are that the appellant- company is engaged in the manufacture of non-alloy steel ingots opted for Compounded Levy Scheme w.e.f. 1.9.1997 declaring that they had installed crucibles of capacities of 2MT and 2.5MT and their annual capacity of production was determined by the Commissioner as 14400MT. When the Central Excise Officer visited on the night of 13.7.1999 and 14.7.1999 and made investigation, it came to light that they were having four crucibles of capacities of 2MT, 2.5MT, 3MT and 4MT and all of them were in working conditions and were installed prior to 1.9.1997. The said crucibles were being periodically serviced for CEA No. 51 of 2010 -4- maintenance by the engineers. The log sheets relating to production of alloy steels and log sheets relating to electricity consumption were recovered and use of the higher capacity crucibles was admitted by several of the employees. According to the assessee, the higher capacity crucibles were kept only as standby and they were used sparingly when other crucibles could not be used. The higher production was achieved by slight modification of the crucibles of 2MT and 2.5MT capacity by increasing the diameter of the crucibles and by increasing the upper and lower levels of crucibles and reducing the thickness of the lining material used. The commissioner, in pursuance of the show cause notice held that the capacity had to be determined on the basis of crucibles of 3MT and 4MT and enhanced the capacity to 22400MT from 14400MT and confirmed demand of differential duty of Rs.92 lacs along with interest and imposed equal amount of penalty. The Commissioner also ordered confiscation of non-alloy steel ingots which was allowed to be redeemed on payment of redemption fine and also ordered for confiscation of two crucibles of 3MT and 4MT but allowed the redemption of the same on payment of redemption fine. Feeling aggrieved, the assessee filed an appeal before the Tribunal who vide order dated 1.7.2009 upheld the order passed by the Commissioner. Hence, the present appeal by the assessee. 4. We have heard the learned counsel for the appellant. 5. Learned counsel for the appellant submitted that the Tribunal was not correct in coming to the conclusion that the capacity of the mill of the assessee was not correctly determined by the Commissioner and the findings of the Tribunal are erroneous and based CEA No. 51 of 2010 -5- on misreading and misappreciation of evidence. Learned counsel further submitted that the Assessing Officer under Section 11A of the Act could not recover any duty under the Act after the expiry of six months as the same was beyond limitation as prescribed under the aforesaid provision. Learned counsel placed reliance on the judgments of the Hon'ble Supreme Court in Continental Foundation JT. Venture v. Commissioner of Central Excise, Chandigarh-I, 2007 (216) ELT 177 (SC), Anand Nishikawa Co. Ltd. v. Commissioner of Central Excise, Meerut, 2005 (188) ELT 149 (SC), Collector of Central Excise, Indore v. Indore Bottling Co., 2003 (151) ELT 11 (SC), Tata Iron and Steel Co. Ltd. v. Collector of Central Excise, Patna, 2005 (181) ELT 311 (SC), Collector of Central Excise, Bangalore v. Balakrishna Perfumary Works, 2002 (142) ELT 519 (SC) and Collector of Central Excise v. Chemphar Drugs & Liniments, 1989 (4) ELT 276 (SC). 6. We have considered the submissions of the learned counsel for the appellant and do not find any merit in the same. The Tribunal after appreciation of evidence had in para 7 recorded as under:- “We have carefully considered the submissions of the learned DR and perused the relevant records. The existence of four furnaces of capacity 2MT, 2.5MT, 3 MT and 4MT at the time of visit of the Central Excise Officers is not in dispute. The fact of installation of four crucibles before 01.09.1997 is clearly established by the evidence of the maintenance CEA No. 51 of 2010 -6- engineer. It is true that an assessee working under Compounded Levy Scheme can keep spare crucibles. However, it was required that they have to give necessary intimation about the availability of spares and also before they use such crucibles. The claim of the appellants that crucibles of 3MT and 4MT were kept as stand by appears to be not acceptable. Further, the quantum of production as per log sheets and quantum of electricity consumed also corresponds to use of crucibles of higher capacity. The submissions that they improvise the crucibles of 2MT and 2.5MT capacity to give higher production also cannot be accepted. It does not stand to reason that the company having capacity of higher capacity crucibles of 3MT and 4MT needs to take improvised methods to enhance the capacity of crucibles of 2MT and 2.5 MT to enable higher production. The evidence is thus overwhelmingly supports the decision of the Commissioner to enhance the annual production of capacity based on 3MT and 4MT capacity crucibles. Therefore, we hold that the enhancement of annual capacity and consequently the demand of differential duty is fully justified.” 7. The Tribunal after appreciation of evidence had categorically concluded that the four crucibles of 2MT, 2.5MT, 3MT and CEA No. 51 of 2010 -7- 4MT capacity had been installed by the appellant before 1.9.1997. The stand of the appellant that crucibles of capacity of 2MT and 2.5MT alone were being used whereas crucibles of 3MT and 4MT were kept as standby was also not accepted in view of quantum of production as per log sheets and also quantum of electricity consumption. The plea of the appellant that it had improvised the crucibles of 2MT and 2.5MT capacity to give higher production especially when crucibles of higher capacity of 3MT and 4MT were available was also not accepted. 8. The effort of the learned counsel for the appellant was only for re-examination or re-appreciation of evidence. Learned counsel made strenuous efforts to persuade this Court to come to a different conclusion on the basis of material on record by re-appreciating the evidence. However, there was no reference to any evidence which could be said to have been misread on the basis of which the conclusion arrived at by the Tribunal could be said to be erroneous or perverse in any manner. The view taken by the Tribunal is a possible view and is not amenable to challenge as no substantial question of law arises. 9. The second contention of the learned counsel for the appellant relates to recovery under the provisions of Section 11A of the Act. As noticed above, the learned counsel for the appellant had submitted that the recovery in terms of aforesaid provision could only be made within six months from the relevant date, the action now initiated beyond the said period of six months was beyond limitation. The argument deserves to be rejected on two counts. Firstly, a perusal of order passed by the Tribunal shows that this point was never urged by CEA No. 51 of 2010 -8- the appellant before the Tribunal and secondly, proviso to Section 11A provides for enhanced limitation of 5 years for recovery in case of excise which has been short levied or short paid or erroneously refunded due to the reason of fraud, collusion or any wilful misstatement or suppression of facts or contravention of any provision of Act or Rules. Once it is held that there was intentional suppression of material information from the Department by not disclosing the installation and use of crucibles of higher capacity, the extended period of limitation shall apply in this case. The judgments, thus, relied upon by the learned counsel for the appellant do not apply to the facts of the present case. Consequently, the second contention is also rejected. 10. In view of the above, no substantial question of law arises for consideration of this Court. Finding no merit in this appeal, the same is hereby dismissed. (AJAY KUMAR MITTAL) JUDGE July 5, 2010 (ADARSH KUMAR GOEL) gbs JUDGE CEA No. 51 of 2010 -9- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CEA No. 52 of 2010 Date of Decision: 5.7.2010 Ravinder Pal ....Appellant. Versus Commissioner of Central Excise-I ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Radhika Suri, Advocate for the appellant. None for the respondent. AJAY KUMAR MITTAL, J. For orders, see CEA No. 51 of 2010 (M/s Singla Steel Pvt. Ltd. v. Commissioner of Central Excise-I). (AJAY KUMAR MITTAL) JUDGE July 5, 2010 (ADARSH KUMAR GOEL) gbs JUDGE