Mahanadi Coalfields Ltd. Vs Commr. of Central Excise (CESTAT Kolkata)
The Customs, Excise & Service Tax Appellate Tribunal, Kolkata considered M/s. Mahanadi Coalfields Ltd.’s appeal against an Order-in-Original confirming Central Excise duty and interest on components excluded from the assessable value of coal. The appellant produced and cleared coal under Chapter 2701. Central Excise duty on coal was introduced at 5% ad valorem from 01.03.2011 and enhanced to 6% from 2012. The Department had issued 22 periodical show cause notices for the relevant period, and the adjudicating authority confirmed the duty and interest without imposing penalty.
The appellant first challenged the delayed adjudication. Reliance was placed on Kopertek Metals Pvt Ltd Vs Commissioner of CGST (West), where the Tribunal had considered the statutory time limits under Section 11A(11) of the Central Excise Act. The appellant contended that the adjudication orders for the covered notices were not passed within the prescribed period and therefore the corresponding demands could not legally be sustained. The Revenue argued that the expression “where it is possible to do so” afforded flexibility and that the delay in the present case was materially less than in Kopertek Metals.
The Tribunal examined the statutory language and the authorities relied upon in Kopertek Metals, including the Delhi High Court’s reasoning in Swatch India and the subsequent Delhi High Court judgment in VOS Technologies India Pvt Ltd Vs Principal Additional Director General & Anr.. It also compared the Central Excise Act, the Customs Act and the Central Excise Manual. The Tribunal found that the statutory expression does not authorise indefinite delay and that a plausible explanation or insurmountable circumstance is required where adjudication is not completed within the stipulated period. In the present case, the 22 notices had been taken up for personal hearing on 10.02.2016, while many notices had been pending for periods of one to two years. The Order-in-Original did not disclose a plausible reason for the delay, and the appellant was not shown to have caused the delay.
