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Steel Exchange India Ltd and Others Versus C.C., Visakhapatnam

2016 (11) TMI 218 - CESTAT HYDERABAD

Waiver of pre-dposite - Classification of steam coal - matter is pending before the larger bench - trade parlance theory - to be classified as Bituminous coal under Tariff entry 2701 12 00 or under tariff entry 2701 19 20 - Held that:- where some of the appellants have obtained waiver of predeposit which has not been challenged or stayed by higher appellate forum, it would tantamount to undue hardship for the remaining appellants on identical issue if predeposit is insisted upon them. Further, a .....

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No.125-140/2016 dt. 08/06/2016 referred sixteen more appeals on identical issue to the Larger Bench, following their earlier Interim Order No.385 to 505 dt. 07/09/2015. Thus, no new facts have emerged to deviate from the earlier view taken by us in Century Textiles case. - Full waiver of pre-deposit granted. - Appeal No. C/21558/2014 - Order No. M/30153 to 30177/2016 - Dated:- 24-8-2016 - Ms. Sulekha Beevi, C.S., Member(Judicial) and Mr. Madhu Mohan Damodhar, Member(Technical) Shri Karan Ta .....

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at Sl.No.16. Shri Rubeen Jairam, Advocate for appellant at Sl.No.24. None for appellants at Sl.No.4, 13, 18, 21 & 22. Shri PRV Ramanan, Special Counsel for the respondents at Sl.No.3, 5, 8, 12, Shri S. C. Bose, Jt. Commissioner(AR) for the respondents at Sl.No.1, 2, 21 to 24. Shri Nagaraj Naik, Deputy Commissioner(AR) for the respondents at Sl.No.9 to 11. Shri Arun Kumar, Asst. Commissioner(AR) for the respondents at Sl.No.4, 6 & 7. Shri P.S. Reddy, Asst. Commissioner(AR) for the respond .....

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on provided under Notification No.12/2002-Cus date 17.03.2012 for import of steam coal. The adjudicating authorities in these cases have confirmed the demands on the ground that the coal imported should be correctly classified as Bituminous coal under Tariff entry 2701 12 00 instead of 2701 19 20 as declared by the appellants at the time of import. The details of demands in these appeals are as shown in the following table: Sl. No Appeal No. Appellant Duty involved Amount deposited, if any 1. C/ .....

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Ltd. Rs.7,02,97,163/- Rs.1,40,58,451/- 9. C/21863/2014 Ambuja Cement Ltd. Rs.3,36,61,020/- NIL 10. C/21863/2014 Ambuja Cement Ltd. Rs.3,98,17,884/- Rs.36,47,504/- 11. C/21985/2014 Madhucom Sugar & Power Industries Ltd. Rs.66,21,926/- NIL 12. C/22059/2014 Karnataka Power Corporation Ltd. Rs.56,07,99,393/- NIL 13. C/22136/2014 Vaswani Industries Ltd. Rs.69,02,704/- NIL 14. C/22317/2014 Sesa Sterlite Ltd. Rs.7,36,12,989/- Rs.2,52,78,023/- 15. C/22421/2014 JSW Cement Ltd. Rs.10,73,90,238/- NIL 1 .....

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t ordered Amount deposited, if any 19. C/21545/2016 Ultra Tech Cement Ltd. Rs.7,50,18,670/- 50% of duty and interest thereon Rs.98,43,234/- 20. C/22304/2014 MMTC Ltd. Rs.4,31,65,728/- 50% of duty and interest thereon NIL 21. C/22733/2014 Maheshwari Brothers Rs.11,05,11,612/- 7.5% of duty Rs.85,74,583/- 22. C/22910/2014 MBG Commodities Pvt. Ltd. Rs.6,35,22,913/- 7.5% of duty Rs.3,12,55,553/- 23. C/21554/2014 Jaiprakash Associates Ltd. Rs.38,13,51,224/- 50% of duty and interest thereon Rs.6,98,89, .....

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e submissions made by counsels/consultants appearing for appellants(Shi. Karan Talwar, Sh. Y. Sreenivasa Reddy, , Sh. T. Jagpathi Rao, Sh. V. J. Sankaram , Sh. B. N. Gururaj, Sh. Gopal Mundra, Sh. M.S. Nagaraja, Sh. Kartik Kurmy, Sh. S.B. Sharma and Sh. Rubeen Jairam) being more or less on the same lines, their arguments are briefly summarized as below:- i) As there is no statutory definition for steam coal , the same should be interpreted in the commercial sense or in common trade parlance. Cla .....

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tion of the Government was to grant exemption to all imported coal used as steam coal and not to a limited/restricted range of steam coal . iv) If the interpretation of the Department is accepted the entry for Coking coal will be rendered redundant. v) The impugned goods are not liable for confiscation under Section 111 (d) and 111 (m) and the imposition of penalty is not sustainable. vi) As per ASTM Standard D388/12 relied on by the Revenue, even if volatile matter and GCV match, if the coal is .....

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the foreign supplier also has not availed CENVAT Credit on inputs and input services. Condition satisfied, but concessional rate of duty denied. One cannot look for intendment, while applying exemption notification as per ratio of Hemraj Gordhandas v. HH Dave, 1978 (2) ELT J350 (SC). viii) In the matter of classification of imported coal, the Bangalore Bench of the Honourable CESTAT held in the case of Coastal Energy Pvt. Limited that the coal imported was Bituminous Coal - 2014 (310) E.L.T. 97 .....

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ration Limited [2015 (316) E.L.T. 305 (Tri. - Chennai)]. ix) In the case of Chettinad Cement Corporation Limited, the Commissioner of Customs, Trichy filed appeals before the Hon ble Madras High Court against the decision of the Chennai Bench referring the matter to the Larger Bench and also questioning the correctness of the CESTAT s Order waiving the condition of pre-deposit and granting stay. The Honourable Madras High Court dismissed the appeals filed by the Commissioner as reported in 2015 .....

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rger Bench at the earliest and dispose of the appeals within a period of two months from the date of receipt of a copy of the Order. Further developments in the Tribunal are however, not known. x) On an identical issue, this Honourable Tribunal vide Misc. Order No. M/30059/2016 dated 16.05.2016 in the case of Century Textiles & Industries Ltd. V/s. CC, Visakhapatnam granted unconditional stay. xi) Further, in the following cases, full stay has been granted by various High Courts and Tribunal .....

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ase of MMTC Ltd. V/s. CC Mumbai Tribunal Stay Order No.S/2841/15/CB dated 28.04.2015 in the case of Mohit Minerals Pvt. Ltd. Hyderabad Tribunal (Circuit Bench) stay Order Nos.20355/2015 dated 05.02.2015 in the case of M/s.NSL Sugars Ltd. V/s. CCE Hyderabad Tribunal (Circuit Bench0 Stay Order Nos. 20369/2015 dated 04.02.2015 in the case of M/s. JSW Energy Ltd. V/s. CC 6. In respect of some of the cases, the counsels pointed out that the steam coal imported by the concerned appellants was of the I .....

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modify the stay orders passed earlier by the Tribunal. On behalf of these appellants, learned counsels Shri Karan Talwar, and Shri Ruben Jairam submitted the following:- a) The Honourable Tribunal in the impugned stay order relied upon the decision in the case of Coastal Energy Pvt. Ltd Vs. Commissioner of Cus, Ex & ST Guntur reported at 2014 (310) E.L.T. 97 (Tri-Bang) wherein Tribunal has ruled out the availability of benefit of Notification No. 12/2012-CE (Sl. No. 67) by comparing the imp .....

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Tribunal in the impugned stay order had relied on the decisions of Asian Natural Resources (India) Ltd V/s. Commissioner of Customs reported at 2014-TIOL-2204-HC-AHM-CUS, Millenium Steel (I) Private Ltd. V/s. Commissioner of Central Excise, Goa reported at 2015-TIOL-870-CESTAT-MUM and Gupta Coal India Private Ltd & Finolex Industries Limited reported at 2015-TIOL-748-CESTAT-MUM.and directed the Appellant to deposit 50% of the amount along with proportionate interest. It is submitted that on .....

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ally differing views of the Benches of the Tribunal, then, all the more this was not a case for imposition of any condition of pre-deposit; that waiver application should have been granted without imposing any conditions. d) Further, in so far as the reliance placed on the decision in the case of Asian Natural Resources (India) Ltd., is concerned, the Hon ble Gujarat High Court Colourtex Industries Limited V/s.Union of India-2015-TIOL- 2466-HC-AHM- CUS distinguished this decision and held that i .....

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mstances, reliance placed upon the said decision does not come to the aid of the respondents. Thus, the decision in the case of Asian Resources (India) Ltd., (supra) has been distinguished in the case of Colourtex (supra) holding that the facts and circumstances are different. e) They also rely on the following decisions of the various High Courts wherein 100% stay has been granted on the ground that the issue has been referred to the Larger Bench on the very same issue: BMM Ispat Ltd. V/s. C.C. .....

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ronounces on the true position of law any decision rendered by any other authority contrary to that, is required to be regarded as an error which is apparent on record and rectification of such an error is permissible under the law. 8. On behalf of the department, the Special Counsel Shri. P.R.V. Ramanan, who appeared in respect of appeals no. C/22001/2014, C/21529/2014, C/21849/2014, C/22059/2014 made the following main submissions opposing the stay application: i. That the judgment of the Trib .....

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i- Chennai) is decided on different parameters and hence there can be no conflict between this decision and that of CESTAT Bangalore Bench in Coastal Energy case (supra). That consequently there was no necessity for CESTAT, Chennai to have referred the issue to Larger Bench. iii) The CESTAT Mumbai Bench has, in respect of M/s. Mohit Minerals, M/s.Bhatia Global, M/s.Asian Natural, M/s. Gupta Goal, M/s. Phoenix Comtrade and M/s. MMTC, noted that it was the convention observed by CESTAT to waive pr .....

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such convention or practice as alluded to by the Mumbai Bench. iv) The Honourable Supreme Court has, as stated, admitted the Civil Appeals filed by the appellants, but the Final order passed by the Bangalore Bench has not been stayed. The prescription of pre-deposit is, therefore, not at all objectionable. Further, the reference to the LB adds no new dimension to the matter because the dispute is already before the Apex Court. In this context, Revenue would rely on the observations of the Tribu .....

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discharge their functions, but that cannot surely mean that in the absence of any provision to the contrary, such tribunal would have the power to grant at the interim stage the final relief which it could grant. 76. The oft-stated principle that courts would not, normally, grant a relief by way of an interim measure, which is either identical with or substantially the same as the final relief sought in the proceeding, is based on the ground that indiscriminate grant of such interim reliefs are .....

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on the judgement of the Honourable High Court of Andhra Pradesh in the case of Hira Ferro Alloys Ltd V/s. CCE, Visakhapatnam [2015 (315) ELT 376 (376)], a copy of which is annexed. Observations of the Court at Paras 5 to 7 are relevant in the context of the present Stay applications. Holding that the said case was in the category of an arguable one of the Court has held that condition of pre-deposit of 50% specified by the commissioner (Appeals) was not unjustified. For the same category of cas .....

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Counsel Shri PRV Ramanan. 10. We have given our anxious consideration to the detailed submissions made by both sides. 11. The very same issue has been dealt by this Bench in the case of M/s Century Textiles Ltd (Appeal No. C/21746/2014-Stay Order M/30059/ 2016 dated 16.05.2016 , relevant portion of which is extracted below:- 3. The appellant however points out that on the identical issue, in the following cases, full stay has been granted by various High Courts and Tribunals since the issue is p .....

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MTC Ltd. Vs. CC. Vii. Mumbai Tribunal Stay Order No.S/284/15/CB dt. 28/04/2015 in the case of Mohit Minerals Pvt. Ltd. viii. Hyderabad Tribunal (Circuit Bench) Stay Order Nos.20350-20355/2015 dt. 05/02/2015 in the case of NSL Sugars Ltd. Vs. CCE. ix. Hyderabad Tribunal (Circuit Bench) Stay Order No.20369/2015 dt. 04/02/2015 in the case of JSW Energy Ltd. Vs. CC. 4. We find that different Benches of this Tribunal have issued orders on identical issue which however are not uniform with regard to g .....

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7.We find that the question or the issue was arguable.? Now that there are rival contentions and equally differing views of the Benches of the Tribunal, then, all the more this was not a case for imposition of any condition of pre-deposit. The waiver application should have been granted without imposing any conditions. If the Larger Bench of the Tribunal is to resolve the matter, then all the more, without expressing any opinion on the merits of the controversy, so also on the point whether mer .....

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ed any opinion on the afore referred question or the controversy arising on account of differing views of the Benches of the Tribunal. All contentions in that behalf are kept open. It would be open for the Revenue to seek a modification of this order in the event the Tribunal s Zonal Bench is unable to take up the appeals for hearing and final disposal expeditiously. 7. The Hon ble High Court of Madras, in the case of CC, Trichy Vs. Chettinad Cement Corporation Ltd, reported in 2015(325) ELT 644 .....

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ave also expressed our prima facie view in favour of the decision of the Tribunal of Chennai Bench in the case of Tamil Nadu Newsprint & Papers Ltd. (supra). Since we are referring these matters to the Hon ble President for constitution of Larger Bench, we waive the pre-deposit of duty along with interest and penalty till disposal of the appeals. Registry is directed to place these matters before Hon ble President for decision on the constitution of Larger Bench. 21. Our attention is invited .....

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2. In response to the above contentions, it is argued by Mr. G. Rajagopalan, learned Additional Solicitor General that the very finding that the respondents have a prima facie case was contrary to law and that therefore, they could not have been granted a waiver. 23. The liability of an assessee to make a deposit of the duty and interest as demanded by the proper officer, when an appeal is filed before the Commissioner (Appeals) or the Appellate Tribunal, arises out of Section 129E. The first pr .....

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Court. Since any payment demanded is contested by every assessee as causing hardship, the Courts have grappled with this question and laid down certain parameters. Therefore, generally in all cases, the Tribunal is bound to look into the question of undue hardship. The question of undue hardship has in-built within itself, the question whether the assessee has at least a prima facie case to persuade the Tribunal to come to a different conclusion that the orders of the Authority under appeal. 24. .....

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would have been answered one way or the other and a decision in favour of either of the parties could have been arrived at. Therefore, at this stage, we do not wish to impose a pre-deposit condition and protract the reference being answered one way or the other. Hence, these appeals are dismissed. The Tribunal is directed to constitute a Larger Bench at the earliest and dispose of the appeals within a period of two months from the date of receipt of a copy of this order. No costs. Consequently, .....

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petitioner is more vigilant about its right is no reason to non-suit the petitioner on the ground that other similarly situated assessees have not thought it fit to move applications for modification of the order of pre-deposit. When the petitioner has moved an application for modification before the Tribunal and has made out a case of changed circumstances and there is a convention to grant complete waiver of pre-deposit when the matter is referred to the Larger Bench, there was no reason for .....

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al for deciding the matter afresh, however, considering the fact that in the case of similarly situated assessees, the Tribunal has already granted complete waiver of pre-deposit and it is a convention to grant waiver of pre-deposit in case the matter is referred to the Larger Bench, no fruitful purpose would be served in remanding the matters to the Tribunal. 16. For the foregoing reasons, the petitions succeed and are accordingly, allowed. The impugned orders dated 15-1-2015 passed by the Trib .....

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e accordingly in each of the petitions with no order as to costs. 9............ 10. We find that the aforesaid High Court decisions are squarely applicable to the present petition. Consequently, we waive pre- deposit and grant stay as prayed for in the case appealed before us, till further orders. 12. The Special Counsel for Department has argued that the decisions of Gujarat High Court in Colourtex Industries case (2015-TIOL-2466-HC-AHM-Cus) and of Bombay High Court in BMM Ispat Ltd case [2016( .....

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ble High Court of Gujarat in Colourtex case has, inter alia, held as follows:- 15. Ordinarily, while setting aside the order passed by the Tribunal, this Court would remand the matter to the Tribunal for deciding the matter afresh, however, considering the fact that in the case of similarly situated assessees, the Tribunal has already granted complete waiver of pre-deposit and it is a convention to grant waiver of pre-deposit in case the matter is referred to the Larger Bench, no fruitful purpos .....

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ferred to a Larger Bench of the CESTAT, which itself happens ordinarily on account of differing opinions amongst coordinate Benches, predeposit in respect of other appeals (filed before 06/08/2014) involving identical issue is invariably waived. This is done with the express purpose of avoiding unnecessary burden to the appellants in a situation where there are conflicting judgments. Special Counsel has pointed out that predeposit has been ordered in respect of a number of appellants by Tribunal .....

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dentical issue if predeposit is insisted upon them. Further, as a Tribunal, this appellate forum is bound to follow the ratio of the judgments laid down by the jurisdictional High Court or if no such judgment is available, of the other High Courts and/or Hon ble Apex Court. This is the judicial discipline that is required of us to follow. This is what the doctrine of stare decisis enjoins us to do. 14.1. Special Counsel has also argued that if the nature of a case is an arguable one, as in the i .....

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en the same can be treated within the fold of undue hardship. But, there are no guidelines in which cases and when undue hardship relatable to prima facie case can be perceived. According to us, it depends upon each and every individual case. Without laying down any exhaustive guidelines, we think that following will be useful for adjudicating the application for waiver of full deposit by the Commissioner as well as this Court. (i) If on apparent reading of the matter, it is found that the order .....

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application of appropriate law or mis-application of law, patently contrary to Supreme Court decision or High Court decision on identical issue which has reached finality, it will also be a strongest case where full waiver be justified. In cases where it is found that there has been an arguable case, apparently, without inviting the counter arguments, the matter cannot be decided, the litigant should be subjected to make pre-deposit to some extent as the learned Commissioner, thinks fit. But, wh .....

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s been stayed or reversed. Hence this cannot be a ground for granting dispensation from pre-deposit under Section 35F of Central Excise Act,1944. It is however noted that not just the Coastal Energy case but a series of such decisions have been appealed to and admitted by the Hon ble Apex Court for example :- 1. M/s. Maruti Ispat and Energy Pvt. Ltd. 2. M/s. Maheswari Brothers 3. M/s. Coastal Energy Pvt. Ltd. 4. M/s. Deccan Cements Ltd. 5. M/s. Hiranyakeshi Sahakari Sakkare Karkhane Niyamit 6. M .....

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ed before this Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy. The subject matter of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit. 17. In the result, the learned Special Counsel and learned ARs for Revenue have not been able to convince us that there has been .....

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