BARDINARAYAN ALLOY & STEEL LTD. Vs. ARIJIT CHAKRABARTI

JUDGEMENT

(1.) THE order dated 30th September, 2013, passed by Customs Excise & Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata disposing of an application seeking waiver of pre -deposit or Cenvat credit and equal amount of penalty is the subject matter of challenge in this writ petition. By the impugned order, the CESTAT directed the petitioner to deposit Rs. 50 lakhs out of the confirmed amount of duty excluding the amount of Rs. 15 lakhs already deposited in course of investigation.

(2.) THE petitioner is a manufacturer of MS ingots and runners and risers which are the excisable goods. A search was conducted at the registered factory premises as well as head office of the petitioner and several documents and records were seized. On scrutiny of those seize documents, the authority found that the petitioners have wrongfully enjoyed the Cenvat credit. A show cause notice cum demand was issued to the petitioner primarily on the ground of clearance of MS 'waste and scrap' at a uniform rate of Rs. 2000/ - per metric tone during the financial year 2005 -2006 to 2007 -2008. Though the Daily Stock Accounts and ER -1 Returns showed the manufacturing of MS ingots, runners and risers in unit one but, they, never manufactured MS 'waste and scrap'. There is also discrepancy in the raw material account as the MS 'scrap' has been included therein under the head 'waste and scrap' and, therefore, was cleared/removed as such. According to the excise authorities, the petitioner removed the 'waste and scrap' for manufacturing final product at a lower price and have wrongly availed the Cenvat credit and demanded the same to be reversed.

(3.) THE learned Advocate for the petitioner submits that the CESTAT has not considered the financial position, which is one of the ingredients having brought within the purview of undue hardship. He further submits that the scrap generated during the manufacturing of the final product cannot be treated as passing the raw material as such. According to him, the waste is generated in the manufacturing process which is a marketable commodity and does not partake the character of the raw material and is treated as the waste. It is vehemently submitted that the CESTAT has not considered that a strong prima facie case has been made out and any direction for deposit of the duty demanded would cause undue hardship. It is lastly submitted that the CESTAT has not adverted to the issues of the limitation which was very much addressed by the petitioner and, therefore, the order impugned is not sustainable.