Dismissed

Commissioner of Central Goods and Service Tax and Central Excise, Alwar v. Rathi Special Steels Limited

Rajasthan HC10 Jul 2024EXCIA/19/2020

Case brief

AI extract

What is this about?

The Rajasthan High Court dismissed an excise appeal filed by CCGST. The court held that the Tribunal correctly relied on the principle in M/s. HR Steels Private Limited. The addition was unsustainable as it rested solely on a 2% production variation compared to SAIL norms without evidence of excess clearance.

What did the court decide?

The appeal filed by the Commissioner of Central Goods And Service Tax and Central Excise is dismissed.

Commissioner of Central Goods and Service Tax and… — GST and Indirect Tax | Rajasthan HC (2024)

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[2024:RJ-JP:28883-DB]

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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D.B. Central/excise Appeal No. 19/2020

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Commissioner Of Central Goods And Service Tax And Central Excise, Alwar, Having Its Office At A-Block, Surya Nagar, Alwar 301001 In The State Of Rajasthan.

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----Appellant

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Versus

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Rathi Special Steels Limited, Having Its Office At Sp-29, F-20 To 24, Industrial Area, Khuskheda, Bhiwadi, Alwar In The State Of Rajasthan.

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----Respondent

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For Appellant(s)	: Mr.Sandeep Pathak with Mr.Arnav Singh
For Respondent(s)	: Mr.R.K. Hasija (Through VC) with
	Mr.Pranav Malik

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HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE ASHUTOSH KUMAR

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Order

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10/07/2024

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AVNEESH JHINGAN, J (ORAL):-

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The appeal is filed against the order of the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (for short ‘the Tribunal’). 2. Brief facts of the case are that the respondent was engaged in the manufacturing of Mild Steel Stainless Steel Bars & Rods. On an audit objection, the appellant initiated proceedings for the period April, 2010 to March, 2015, on the ground respondent had a ratio of 93% finished goods viz-a-viz inputs consumed, whereas Steel Authority of India Limited (for short ‘SAIL’) had fixed a norm of 95% production. On short production duty was levied by treating it to be finished goods cleared without payment of duty

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(2 of 3)

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[2024:RJ-JP:28883-DB]

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[EXCIA-19/2020]

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and penalty was also imposed. The addition was set aside by the Tribunal vide order dated 15.04.2019. Hence, the present appeal. 3. Learned counsel for the appellant submits that the Tribunal has not discussed merits of the case and has only relied upon decision of the Tribunal in M/s. HR Steels Private Limited Vs. Commissioner of Central Excise and Service Tax in Appeal No.E/52703/2016-[DB].

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Learned counsel for the respondent defends the impugned order.

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Following substantial question of law has been proposed:-

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“1. Whether in the facts and circumstances of

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the case an in law the ld. Tribunal was correct in allowing the appeal of the assessee and setting aside the OIO without considering material facts discussed in the OIO dated 21.06.2016 with reference to the Central Excise Rules, 2002 ?”

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The undisputed facts are that apart from the variation in production percentage as compared to the norms fixed by the ‘SAIL’, there was no other material available with the Department of the alleged excess production being cleared without payment of duty. The variation as per the Department was of only 2%. Further that the Plant and Machinery used by the respondent was not of the latest technology as that of the SAIL.

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The Tribunal recorded following findings:-

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“7. Thus, we find that the issue is similar to the one which was decided in M/s. HR Steels (supra). No evidence was led by the Department regarding use of raw material, electricity, sale of material or mode or transport nor any evidence was led to substantiate

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[EXCIA-19/2020]

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[2024:RJ-JP:28883-DB]

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(3 of 3)

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that the Appellant was using the same advanced technology as SAIL. The impugned demand is, therefore, not sustainable.”

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The above quoted findings have not been challenged or disputed in the present appeal. During the course of arguments, no factual distinction between the facts of the present case and of M/s. HR Steels (supra) has been made out. The addition was made only on the sole ground of 2% variation in production output of the respondent as compared to SAIL.

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No question of law much less substantial question of law is involved.

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The Appeal is dismissed.

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(ASHUTOSH KUMAR),J

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(AVNEESH JHINGAN),J

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Monika/Aarzoo/83

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Whether Reportable : Yes

Commissioner of Central Goods and Service Tax and Central Excise, Alwar v. Rathi Special Steels Limited

Case brief

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Commissioner of Central Goods and Service Tax and Central Excise, Alwar v. Rathi Special Steels Limited

Case brief

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