Relief to Hindalco Industries: CESTAT quashes Central Excise Duty Demand [Read Order]

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the central excise duty demand, thereby granting relief to M/s Hindalco Industries Limited, the appellant.

M/s. Hindalco Industries Ltd. is engaged in the activity of manufacturing and clearance of aluminium ingots and aluminium coils falling under chapters 76 and 38, respectively of the First Schedule of the Central Excise Tariff Act.

The department alleged that the Appellant had not determined the assessable value of the cleared goods as per Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 read with Section 4(1)(b) of the Central Excise Act, 1944.

 It was also alleged that the appellant resorted to suppression, wilful misstatement of material, facts and contravention of various provisions of the Central Excise Act and Rules made thereunder with the intent to evade payment of central excise duty.

A show cause notice was issued to the Appellant demanding central excise duty amounting to Rs.62 lakhs for the period December 2009 to March 2010 under the proviso to Section 11A(1) of the Central Excise Act, 1944 along with interest under Section 11AB of the Central Excise Act and penalty under Section 11AC of the Central Excise Act was also proposed.

The counsel for the appellant submitted that the entire issue is revenue neutral in nature as any duty charged on the invoices based on which goods are cleared, the other unit of the appellant was eligible for claiming Cenvat Credit on the same. Further, the duty paid by the other units through the Profit and Loss Account was much more than the differential demand of duty in the present case.

The Two-Member Bench of the Tribunal comprising P.K Choudhary, Judicial Member and K Anpazhakan, Technical Member observed that “When excess paid duty is adjusted against the short payment that net result is that there is no short payment by the Appellant. The Adjudicating Authority failed to do this adjustment. Demanding duty only on the short payment and ignoring the excess payment is bad in law. Accordingly, we hold that the demand confirmed in the impugned order is not sustainable.”

To Read the full text of the Order CLICK HERE

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