4F^ ^ ^ fflGH COURT OF CHHATTISGARH AT BH.ASPUR WMT PETITION m No. 2924 of 2009 PETITIONER APPELLANT BEFORECESTAT RESPONDENTS RESPONDENTS BEFORE CESTAT M/s. Ambuja Cements Ltd. VERSUS Union oflndia & another. -\. Post for pronouncement ofjudgment and orderon .<<?;.07.2009. Sd/- Satish K. Agnihotri Judge 4.; HIGH COURT OF CHHATTISGARH AT BILASPUR WMT PETITION fT) No. 2924 of2009 PETITIONER APPELLANT BEFORE CESTAT RESPONDENTS RESPONDENTS BEFORE CESTAT M/s. Ambuja Cements Ltd. Unit - Bhatapara, P.0. Rawan, Teh. Balodabazar, Raipur. Authorised Signatory: J.B.Lama, S/o Shri S.B.Lama, 51 yrs, Sr. Manager (Excise) Ambuja Cements Ltd. (Unit Bhatapara) R/o A-2/03, Ambuja Cement Colony, AT & P.0. Rawan, Baloda Bazar, Raipur. VERSUS 1. Union oflndia, Through Secretary, Ministry of Finance, Revenue Deptt. North Block, New Delhi. 2. Commissioner of Central Excise, Raipur, Commissionerate, Central Revenue Building, Tikrapara, Dhamtari Road, Raipur. WRIT PETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA SB: Hon'ble Shri Satish K. Aenihotri, J. Present: Shri M.P.Devnath, Advocate with Shri Raja Sharma, Advocate for the petitioner. Shri Bhishma Kinger, Standing Counsel for the Union oflndia/ respondents. JUDGMENT & ORDER (Passed on ..S.^. day ofJuly, 2009) With the consent ofthe parties, the matter is heard finally. 1. Challenge in this petition is to the order dated 20.05.2009 (Annexure P/l) passed by the Customs, Excises & Service Tax Appellate Tribunal, Principal Bench, New Delhi, i.e. Stay Order No. 425/2009-EX, in Stay Application No. E/STAY/2714/2008-EX In, in Appeal No. E/2704/2008-EX (DB) whereby the leamed Tribunal declined to grant stay of the order dated 22.10.2008 (Aimexure P/7) passed by the Commissioner, Central Excise, Raipur, except the pre-deposit amount ofpenalty was waived till the disposal ofthe appeal. 2. The facts, in nutshell, as projected by the petitioner are that the petitioner is engaged in manufacture ofcement and clinker under Chapter 25 ofCentral Excise Tariff and the same is sold on payment of appropriate Central Excise duty. The Cenvat eredit ofduty ofpaid inputs used for such maaufacture and for dutiable products of the petitioner company is govemed under the provisions of Cenvat Credit Rules, 2004 (for short 'the Rules, 2004'). In order to expand the production capacity and to set up a captive power plant, the petitioner availed the Cenvat credit of Rs. 1,05,50,0960.00 fi-om the period Januaty, 2007 to August, 2007 on the iron and steel items falling under chapter 72 of the Central Excise Tariff Act, 1985 (5 of 1986) (Annexure P/2). Thereafter, relevant work orders and contract were awarded to yarious contractors in respect of fabrication of capital goods. The petitioner, on 31.01.2008 (Annexure P/4) was served with a notice to show cause asto why: (i) Cenvat Credit amounting to Rs. 1,02,49,069.00, Education Cess amounting to Rs. 2,05,315.00 and Secondary and Higher Education Cess amounting to Rs. 95,712.00 (Total Rs. 1,05,50,0960.00) should not be disallowed and recovered under the provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with section 11A of the Central Excise Act, 1944 (for short 'the Act, 1944'), (ii) penalty should not be imposed upon them under the provisions ofRule 15 ofthe Rules, 2004 forviolation ofRule 2 and 3 ofthe Rules, 2004, and (iii) interest should not be charged and recovered from them from the relevant date at appropriate rate in terms ofRule 14 ofthe Rules, 2004. 3. The petitioner, on 23.04.2008 (Annexure P/5) filed a detailed reply to the show-cause-notice dated 31.01.2008 issued by the respondent No. 2 stating therein thatthe inputs delivered were usedonly for the purpose of fabrication of eligible capital goods, hence, the petitioner was entitled for the Cenvat Credit. At the time of personal hearing it was also stated therein that the Commissioner (Appeals) Raipur, has ^llowed the appeal ofthe petitioner for the earlier period. Thereafter, on 22.10.2008 (Annexure P/7), the respondent No. 2 passed a detailed order in Original RPR/91/2008 by disallowing total Cenvat Credit amounting to Rs. 1,05,50,0960.00 wrongly availed on the impugned items and ordered for its recovery alongwith interest under Rule 14 ofthe Rules, 2004 read with section 11-A and 11-AB ofthe Act, 1944 and imposed a pehalty ofRs. 1,05,50,096.00 under Rule 15 ofthe Act, 2004 read with Section 11-AC ofthe Act, 1944. Further, it was clarified in the order itselfthat the amount ofpenalty imposed will stand reduced to 25% ifthe eredit disallowed alongwith interest and the penalty equal to 25% is paid within 30 days ofthe communication ofthe order. 4. Being aggrieved, the .petitioner, on 24.12.2008 (Annexure P/8), filed an appeal before Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi, alongwith an application for stay of the order dated 22.10.2008 (Annexure P/7) passed by the respondent No. 2. 5. The leamed Tribunal, having considered the submissions of the petitioner and the respondents, observed as under: "11. In the absence ofthe appellant having satisfactory reply as regard the quantification ofthe steel utilized as inputs for manufacture ofthe capital goods and m spite ofclear fmding by the adjudicating authority on the said aspect against the appellant, we do not find any case of hardship being made out by the appellant in case of insistence for deposit 6f the amount of duty under the impugned order and interest ^r-^ //^ g •SBS ^ -.uiis--- y j: '^w^,/ ^ '* VS1" /' "^- fSCS^'> thereon. Besides, in the facts and circumstances of the case, in our considered opinion, interest ofthe Revenue also would be safeguarded ifthe pre-deposit insisted upon in that regard. 12. We, however, would exercise our discretion for not insisting for deposit of the penalty amount which is ordered to be paid in the impugned order, more particularly, in view of the order passed in Vandana Global Ltd. (Supra). 13. Needless to say that, all the observations made hereinabove are in relation to the application for stay and shall not, in any manner, affect the case of the appellant while dealing with the matter on merits. Application, therefore, party succeeds. The pre-deposit of amount of penalty is waived till the disposal ofthe appeal. As regards the amount of duty and interest thereon, the appellant shall deposit the same within eight weeks from today." 6. Shri M.P.Devnath with Shri Raja Shanna, leamed counsel appearing for the petitioner would submit that on 04.05.2009, the petitioner submitted before the leamed Tribunal that the issue ofeligibility ofthe Cenvat Credit on inputs has been referred to the larger Bench in the case of Vanadana Global Ltd. v. CCE {2008 (230) ELT 169}. Leamed counsel would further submitthat once the issue is referred to a larger Bench, the Tribunal should grant stay. In support ofhis contention, leamed coimsel relies on L.G.Balah-ishna v. CCE {2008 (229) ELT 302}, Eastern Medical v. CCE {2008 (227) ELT 392} and Shakti Foam v. CCE {2007 (208) ELT 273}. It was next urged that under similar circumstaaces, other assesses have been granted stay in view of the reference of the issue to a larger Bench. Further, the reliance placed by the leamed Tribunal on the judgment in the case ofM/s. Quality Steel Tubes Pvt. Ltd. v. CCE, Pme {1995 (75) ELT 17 (SC) } is mis-placed. The petitioner has cited several other decisions wherein the question of law involved was with regard to iron and steel products eligibility for modevat credit/Cenvat Credit, and other issues. 7. Per contra, Shri Kinger, leamed counsel appearing for the respondents opposes the submission of the petitioner and argues in support of the order dated 20.05.2009 (Annexure P/l), impugned herein. 8. Having heard leamed counsel for the parties, perused the pleadings and documents appended thereto, it is evident that the issue referred to the larger Bench in Vandana Global (supra) was as under: "a. Whether the tenn "capital goods" can include plant, structures embedded to earth? b. Whether the goods like angles, joists, beam, channels, bars, flats which go into fabrication of such structures can be treated as 'inputs' in relation to their final products as inputs for capital goods, or none ofthe above? c. Whether the credit can be allowed in respect of goods like angles, joists, beam, channels, bars, flats which go into fabrication ofsuch stmctures and plant?" 9. In the present case, stay was declmed on the ground that the petitioner had suppressed material facts as the petitioner has not submitted details asto quantification ofsteel utilized as inputs for manufacture ofthe capital goods. Inspite ofthe clear finding by the adjudicating authority, the petitioner failed to disclose any details as regards the quantity ofsteel utilized for the purpose other than the manufacture of capital goods while admittedly, the steel purchased by the petitioner was not only used for the manufacture of the capital goods but also for other purposes. The purchase order discloses the total quantity of the steel on which the Cenvat Credit was sought to be availed. But the petitioner has failed to disclose as to how much steel was used for the pwpose of manufacture of capital goods alone. Accordingly, the impugned order was passed as stated above. •..!•?«'"•UW4'"<11;;' L- L, 10. The dispute involved in the matter are still pending consideration before the Tribunal. There is no dispute with regard to the contention that if the same issue is referred to a larger Bench, in ordinary course, there should be stay of the Tribunal's order. 11. It is well-settled that in the matters of interlocutory orders, principle of binding precedent cannot be said to apply. Applying the well-settled principles to the facts ofthe case, the petitioner has failed to make out a case for stay of the order impugned. Even the issue referred to larger Bench was also not the same which is involved in the present case. There is no quarrel on the ratio laid down by the Hon'ble Supreme Court and other courts with regard to reference ofthe dispute to the larger Bench. However, keepjng in view the facts involved in the case, I am of the view that there is no irregularity or error in the impugned order passed by fhe leamed Tribunal. 12. For the reasons stated hereinabove, I do not find any irregularity or error in the impugned order dated 20.05.2009 (Annexure P/l) warranting interference. 13. The petition is accordingly dismissed.No order asto costs. Sd/- Satish K. Agnihotri Judge Amit