Custom, Excise & Service Tax Tribunal
M/S Jindal Saw Limited vs Bangalore-I on 12 March, 2026
Excise Appeal No. E/21035 of 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
BANGALORE
REGIONAL BENCH - COURT NO. 2
Central Excise Appeal No. 21035 of 2017
(Arising out of Order-in-Original No. BEL/EXCUS/000/COM/BKK/057/16-17 dated
30.03.2017 passed by the Commissioner of Central Excise and Customs, Belgaum)
M/s. Jindal Saw Limited
Jindal Centre,
12 Bhikaji Cama Place, New Delhi. - 110066. ........Appellant
VERSUS
Commissioner of Central Excise,
Belgaum
No. 71, Club Road, Belgaum,
Karnataka - 590001. ............Respondent
Appearance:
Mr. Muthu Venkatraman & Mr. Aryaman Ghulati, Advocates for the Appellant Mr. Vinod Kumar Garhwal, Authorised Representative (AR) for the Respondent CORAM:
Hon'ble Mr. P.A. Augustian, Member (Judicial) Hon'ble Mr. Pullela Nageswara Rao, Member (Technical) Final Order No. 20285 /2026 Date of Hearing: 23.09.2025 Date of Decision: 12.03.2026 Per: P. A. Augustian The present appeal is filed by M/s. Sathavahana Ispat Ltd (herein after referred as assessee) against the impugned order dated 30.03.2017 challenging recovery of CENVAT credit availed allegedly irregularly during the period from 17.03.2012 to 31.03.2015. However, during pendency of Page 1 of 7 Excise Appeal No. E/21035 of 2017 the present appeal, insolvency proceedings were initiated against the original Appellant under Section 9 of the Insolvency & Bankruptcy Code (IBC), 2016 by one of the operational creditor M/s Thirumala Logistics and the Department filed their claim in relation to the impugned order on 24.09.2021. After due process, M/s Jindal Saw Ltd (JSL) (herein after referred as Appellant) was the successful resolution applicant and was approved by NCLT vide order dated 31.03.2023. Admitted claims were settled @ 38.48%. Accordingly, in addition to the amount deposited prior to show cause notice and pre-deposit, total duty demanded as per the claim of the Department was Rs. 16,10,892/- and as per the NCLT order dated 31.03.2023, the amount payable is settled as Rs.6,19,871/-. As per said order, an amount of Rs. 6,19,797/- was paid by the present Appellant and issue regarding demand of duty is settled, accordingly.
Thereafter, appellant herein filed a petition for continuance of the proceedings under Rule 22 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 to consider the issue regarding invocation of extended period of limitation and imposition of penalty under Section 11AC. In support of the same, affidavit is also filed by the appellant herein stating that no amount would be liable to be refunded to the appellant herein even on succeeding the issue before this Tribunal on the aspect of invocation of extended period.
2. As regards the basic issue, Appellant was manufacturer of metallurgical coke and was availing CENVAT credit of duty paid on input, capital goods and input services under the provisions of CENVAT Credit Rules, 2004. During the course of audit, on verification of monthly ER-1 returns, Bills of Entry, Cenvat Register and other allied records, it was observed during the period from September 2011 to August 2012, that the assessee had availed excess Cenvat Credit of Education Cess of Rs.22,86,063/- & SHE Cess of Rs.11,43,035/- totaling to Rs.34,29,103/- on CVD towards import of Coking Coal. On further verification of the details of the above excess Cenvat Credit, it was found that the assessee had, on their own volition calculated, availed & utilised credit on that portion of the Customs Education Cess and Customs SHE Cess which relates to the CVD component. In other words, the assessee had availed Page 2 of 7 Excise Appeal No. E/21035 of 2017 credit of a portion of Customs Education Cess and Customs SHE Cess, relatable to the value of CVD reckoned while calculating the said Customs Ed. & Customs SHE cess. Thus, these credits have been availed by mis- representing them as Education Cess and SHE Cess on the CVD. The amount of credit of portion of Customs Cess relating to the CVD component which has been availed and utilized works out to Rs.34,29, 103/- (Customs Education Cess Rs.22,86,068/- & Customs SHE Cess Rs. 11,43,035/-) during the period from 09/2011 to 08/2012. It is further observed that during the period from 17.03.2012 to 31.03.2015, when the Education Cess and SHE Cess on CVD was withdrawn vide Notifications No. 13/2012-Cus and 14/2012-Cus both dated 17.03.2012 respectively, the appellant continued to avail and utilize the credit as indicated above by calculating the credit on their own, on a portion of the Customs Education Cess and Customs SHE Cess which works out to Rs.1,86,99,836/-(Ed. Cess Rs. 1,24,53,967/-and SHE Cess Rs. 62,45,869/-). Accordingly, show cause notice was issued on 22.09.2016 and thereafter Adjudication Authority as per the impugned order dated 24.03.2017 confirmed recovery of cenvat credit irregularly availed, appropriation of payment made during investigation and imposed penalty. Aggrieved by said order, present appeal is filed.
3. When the appeal came up for hearing, Learned Counsel submits that the finding given by the Adjudication authority regarding illegal utilization of the CENVAT credit is sustainable as per the decision of the Tribunal in the matter of M/s. Nirma Ltd & 2 others Vs CC (2018 (2) TMI-476-CESTAT Ahmedabad. Since the issue regarding demand is settled by the NCLT order dated 31.03.2023, the Appellant is only challenging the finding in the impugned order regarding invoking the extended period of limitation and penalty. In this regard, Learned Counsel draws our attention to following judgment / decisions:-
A. M/s. Levis Strauss India Pvt Ltd. Vs. CCE &ST, Bangalore - 2024 (12) TMI 1362 Instructions issued by the Central Board of Excise & Customs [CBEC] dated 24.12.2008 Page 3 of 7 Excise Appeal No. E/21035 of 2017 B. Customs v. Prashray Overseas Pvt. Ltd., reported in 2016 (338) ELT 44 (Mad.) C. Venus Wire Industries Pvt. Limited V. Commissioner of central Excuse reported in (2022) 1 Centax 9 (Tri.-Bombay) D. Central Excise v. Nirmala Dyechem reported in 2007 (207) ELT 161 (S.C.).
E. Sunshine Steel Industries v. Commissioner of CGST reported in 2023 (1) TMI 638 - CESTAT, New Delhi F. M/s. Delta Power Solutions India Pvt. Limited v. CCE reported in 2021 (11) TMI 174-CESTAT New Delhi G. Pushpam Pharmaceuticals Company vs. Collector of Central Excise, Bombay [1995 (78) E.L.T. 401 (SC) H. Anand Nishikawa Co. Ltd. vs. Commissioner of Central Excise, Meerut [(2005) 7 SCC 749] I. Uniworth Textiles Ltd. vs. Commissioner of Central Excise, Raipur [2013 (288) E.L.T. 161 (SC)] J. M/s. Levis Strauss India Pvt. Limited v. CCE reported in 2024 (12) TMI 1362 - CESTAT Bangalore K. Kirloskar Pneumatice Co. Ltd. v. Commissioner of Central Excise reported in 2010 (1) TMI 521 CESTAT Mumbai
4. The Learned Counsel further submits that the issue regarding continuance of proceedings after adjudication as an insolvent party to the Appeal/application, short payment of duty, reversal of the CENVAT credit are settled as per the decision of the Tribunal in the matter of M/s Alok Industries Ltd vs CC, Belapur - 2022 (10) TMI 801- CESTAT, Mumbai, it is held that;
"4.9 We are satisfied that the test laid down by the Hon'ble High Court is applicable in the present case for us to hold so. It is quite interesting to note that applicant to the extent of demand made finds the order of NCLT Page 4 of 7 Excise Appeal No. E/21035 of 2017 binding and wants pronouncement in respect of the refund by this tribunal. Can we sit in judgment over the order of NCLT approving the resolution plan? Further issue of refund is any case not the issue raised in appeal it is for the applicant to approach the relevant authorities in the matter.
4.10 In view of above we dispose of the appeals and the miscellaneous application as follows:
5.1 The appeals filed abate as per the Rule 22 of the CESTAT Procedure Rules, 1982, with effect from the date of the approval of the resolution plan by the NCLT.
5.2 Since the appeals have abated the miscellaneous application filed by the applicant/appellant does not survive."
5. The Learned Counsel further draws our attention to the judgment of the Hon'ble Supreme Court in the matter of M/s Fourth Dimensions Solutions Vs Ricoh India Ltd in C.A No. 598/2021 dated 21.01.2022, where it is held that;
"In our opinion, it was sufficient for the NCLAT to dispose of the appeal before it by restating factual position noted while submitted for approval the considering the Plan Committee of before Creditors. In paragraph 48 of the impugned judgment, the NCLAT has noted thus:
"... The name of the Appellant was mentioned in the list of Operational Creditors. On 29.11.2018 the RP published updated list of Creditors of the Corporate Debtor, wherein the admitted claims of the Appellant was indicated as 'Nil' with an appended note: "2. The claims pertaining to FDSL have been disputed and are proceedings Authorities. Arbitrators/Appellate the before The liability is subjected to outcome of these proceedings".
In light of this factual position, in our opinion, the appeal needs to be disposed of by restating the said fact with liberty to the parties to pursue all contentions available to them in the proceedings pending at the relevant time, if any.
It is stated that some arbitration proceedings were pending between the parties. If so, all contentions available to both sides be decided in the said proceedings on its own merits in accordance with law."
Page 5 of 7Excise Appeal No. E/21035 of 2017
6. Learned Authorized Representative (AR) reiterated the finding in the impugned order and draws our attention to the order issued by NCLT where it is specifically stated that "Including contingent claim of INR 13,83,21,307.95 (Rupees Thirteen Crore Eighty-Three Twenty-One Thousand Three Hundred Seven and Ninety-Five Paise only) i.e., the dues which are under litigations and will be distributed subject to the outcome of the litigations. In case outcome of any litigation results into no liability to pay such dues, amount inducted towards the same shall be retained by the Corporate Debtor". Thus, the issue regarding penalty can be considered on merit by this Tribunal. Learned AR further submits that since the NCLT approved total demand including the demand confirmed by invoking the extended period of limitation, the appellant is liable to pay interest and penalty as imposed by Adjudication Authority and such claims have to be included in the contingent claim.
7. Heard both sides and perused the records.
8. We find that during pendency of the proceedings the respondent had filed the claim of Rs. 2,84,75,081/- before the liquidator including Central Excise Duty payable of Rs. 16,10,892/- (by excluding the amount of Rs.1,88,58,376/- and Rs.61,55,070/- paid during investigation which was appropriated as per the impugned order), Interest of Rs. 47,35,250/- and Penalty of Rs. 2,21,28,939/- under Regulation 20 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. After due process of law, NCLT vide order dated 31.03.2023, settled the admitted claims @38.48%, accordingly in addition to the amount deposited prior to show cause notice and pre-deposit, total duty demanded as per the claim of the Department was settled as Rs. 16,10,892/-. Thus, on payment of said amount, the issue is settled. Though as per the Rule 22 of the CESTAT Procedure Rules, 1982, appellant herein can proceed with the appeal on merit, once Appellant is only challenging the finding in the impugned order regarding invoking the extended period of limitation and penalty, following the ratio of the Tribunal in the matter of M/s. Alok Industries Ltd (supra), the Page 6 of 7 Excise Appeal No. E/21035 of 2017 demand of interest and imposition of penalty are unsustainable, since issue is settled as per the order of the NCLT.
9. In view of the above discussion, the impugned order confirming interest and penalty are unsustainable. Accordingly, the Appeal is disposed.
(Order was pronounced in open court on 12.03.2026.) (P. A. AUGUSTIAN) MEMBER (JUDICIAL) (PULLELA NAGESWARA RAO) MEMBER (TECHNICAL) Sasi Page 7 of 7