In Excise Appeal No.631 of 2012- CESTAT - CESTAT (Kolkata) rules in favour of M/s. Hindalco Industries Ltd, holds demanding duty only on short payment while ignoring excess payment was bad in law
Members P.K. Choudhary (Judicial) & K. Anpazhakan (Technical) [16-05-2023]

Read order: M/s. Hindalco Industries Limited v. Commissioner of Central Excise, Bhubaneswar-II

LE Correspondent

Kolkata, May 17, 2023: The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal has come to the aid of M/s. Hindalco Industries Ltd., Hirakud (appellant), ruling that it was bad in law to demand duty only on the short payment while disregarding the excess payment made by the appellant.

Briefly stated facts of the case were that the appellant was engaged in the activity of manufacturing and clearance of aluminium ingots and aluminium coils. Apart from the Hirakud Unit, the appellant also has other units viz., Muri, Belgaum, Mauda, Taloja, Belur etc. The Muri and Belgaum units transferred calcined alumina to their Hirakud Unit for usage in the manufacture of aluminium ingots and coils. The Hirakud Unit then transferred the goods to Mauda, Taloja, and Belur Units, where the aluminium ingots and coils were further processed to manufacture aluminium sheets and foils and the final products were cleared by paying central excise duty.

For the specific months, the department contended that the appellant had short paid duty in the months of December 2009 to March 2010 for ingots and February 2010 to March 2010 for coils. Accordingly, the differential duty of Rs 62,63,509/- was demanded vide show cause notice dated 05/09/2011, and the demand was confirmed by the Adjudicating authority vide the impugned order dated 28/06/2012.

The Tribunal observed that when excess paid duty was adjusted against the short payment, that net result was that, there was no short payment by the appellant. Placing reliance on Principal Commissioner CGST and Central Excise Headquarters Bhopal v. Godrej Consumer Products Ltd [LQ/MPHC/2019/614], the Tribunal held that the demand confirmed in the impugned order was not sustainable.

The Tribunal also examined the case of Commissioner of Central Excise, Pune v. M/s. Coca-Cola India Pvt. Ltd [LQ/SC/2007/1589] and agreed with the appellant's argument that the entire exercise of duty payment was revenue neutral because the duty paid by the appellant would be available as a credit to their sister unit, therefore, there was no loss of revenue to the exchequer.