RATHI ISPAT LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE facts leading to filing of this appeal and stay application and hearing of this matter for de novo decision on stay application are, in brief, as under: - -

(2.) "1.1 The appellant are a manufacturer of Stainless Steel Billets (hereinafter referred to as S.S. Billets), other Alloy Steel Billets (hereinafter referred to as OAS Billets), stainless steel flats and steel castings. The period of dispute in this case is from March'94 to Nov. '95 and during this period Sh. Anil Rathi, Sh. Pradeep Rathi and Sh. Arun Rathi were directors of the appellant company and Sh. M.L. Aggarwal was an employee. During the period prior to 1 -3 -1994, while duty on 'OAS Billets' was at a specific rate of Rs. 1000/ - per MT, the rate of duty on S.S. Billets was 12.5% ad valorem. w.e.f. 1 -3 -1994, the duty on 'OAS Billets' as well as 'S.S. Billets' become at the uniform rate of 12.5% ad valorem. The first allegation against the appellant company is that during period prior to 1 -3 -1994 i.e. during 5 -8 -1993 to Feb.'94 period and during subsequent period from March, 1994 to July, 1994, they cleared S.S Billets by misdeclaring the same as 'OAS Billets' and by adopting this modus operandi, they evaded duty of Rs. 1,83,94,168/ - & Rs. 88,12,974/ - respectively. This allegation is based on the chemical test reports of CRCL according to which during this period the chromium content of the alloy steel billets being manufactured by them and cleared as 'OAS' steel billets was 10.5% or more, which would put them in the category of stainless steel, as against the appellant company's claim of the chromium content being less than 10.5%.

(3.) SH . V.P. Batra, the learned DR, opposed the stay application by reiterating the findings of the Commissioner in the impugned order and pleaded that the test reports of the chemical examiner in respect of OAS Billets during Aug. 1993 to Feb. 1994. Period clearly show that chromium content was more than 10.5% and hence the billets being sold by the appellant as OAS Billets were actually S.S. Billets, that the statements of customers of the appellant company buying S.S. Patta/Patti from them and also statements of other manufacturers of S.S. Billets clearly show that the prevailing price of S.S flats during period of dispute was Rs. 33000 -34000 PMT and hence the price of S.S. Billets from which the S.S. flats are manufactured cannot be as low as Rs. 16,200/ - to Rs. 19,250/ - per PMT, that during period w.e.f. March 1994 there was no justification for the appellant for reducing price of the S.S. Billets when there was no change in the price for S.S. flats and S.S. Pattas/Pattis, that no manufacturer would sell the goods manufactured by him at price much below the prevailing market price, that this shows that the appellant during period of dispute had under declared price of S.S. Billets and the difference between the declared price and actual market price was being received by them in cash, that during period prior to March 1994, the appellant were evading duty by misdeclaring 'S.S. Billets' being manufactured and cleared by them as 'OAS Billets' on which the duty was chargeable at specific rate of Rs. 1000 PMT, that during period from March 1994 when the rate on duty of OAS Billets and 'S.S. Billets' was made a uniform 12.5% adv, the appellant started undervaluation of S.S. Billets, that Modvat credit demand has been correctly confirmed, as the credit, in question, had been taken either without actually receiving the material or on the basis of documents which were not valid documents, that the directions of the Tribunal in its remand order have been complied with as far as possible and the appellant cannot have any grievance on this account, that the appellant being under BIFR would not save them from the provisions of Section 35F, that in any case, when the appellant face serious allegation of huge duty evasion by misdeclaration and undervaluation, their plea of incurring huge loss is not credible and that in view of these circumstances, stiff conditions must be imposed to safeguard the interest of Revenue and this is not a case for total waiver.