Coal Classification - Reference to Larger Bench Stayed
WHEN the then Hon'ble Finance Minister in his budget speech for 2012-13 said "Domestic producers of thermal power have been under stress because of high prices of coal. I propose to ease the situation by providing full exemption from basic customs duty and a concessional CVD of 1 per cent to Steam coal for a period of two years till March 31, 2014. Full exemption from basic duty is also being provided to the following fuels for power generation ", he perhaps might not have realized that he is actually triggering the stress for the Industry in the next few months and " easing the situation" is never going to be a reality.
The premier investigating agencies started to believe that the thermal power producers of this country, both in public and private sector have been evading crores of Rupees of customs duty by irregularly taking benefit of the exemption announced by the Finance Minister by mis-classifying their coal as Steam coal while it merits classification as Bituminous coal. They started protecting the revenue for the Government.
When the matter reached Tribunal, the Bangalore Bench in Coastal Energy Pvt Ltd & Others Vs CCE upheld the demand on coal imported by classifying the same as Bituminous Coal under Customs Tariff 2701 1200 and rejected the contention of the importers that it is classifiable as Steam Coal. In subsequent order in case of Maheswari Brothers Vs CCE - , the Tribunal ordered pre-deposit of duty and interest.
The Ahmedabad Bench of the Tribunal had also ordered pre-deposit - and even an appeal by one of the parties to the High Court was not successful. - 2014-TIOL-2204-HC-AHM-CUS.
When the issue came up before the Chennai Bench of the Tribunal disposing the stay applications filed by a large number of appellants, the Bench observed that there is a conflict between decisions in case of Tamil Nadu Newsprint & Papers Ltd. Vs Commissioner of Customs, Tuticorin - and Maheswari Brothers and placed the matter before the President for constitution of Larger Bench. ()
Now that Chennai Bench has referred the matter to the Larger Bench, will other appellants in the queue get waiver of pre-deposit?
Not exactly that happened.
The Bangalore Bench of the CESTAT in a recent order, (2015-TIOL-1507-CESTAT-HYD) observed, "it can be seen that there is a High Court decision, two final orders of the Tribunal and the decisions of the Mumbai Bench ordering pre-deposit and also observations in paragraph 7.3 based on standard text which show residual moisture as well as inherent moisture are determined and only difference is in temperature and both are different.", and the tribunal ordered pre-deposit of 50% of the duty demanded.
In the meanwhile, recently the Madras High Court stayed the Chennai CESTAT order referring the issue to the Larger Bench. The High Court observed, "We are inclined to accept the prima facie case of the appellant that there is no need for the Tribunal to refer the matter to the Larger Bench in the light of the two decisions referred to by the Tribunal. Hence, there will be an order of interim stay of reference to the Larger Bench."
We bring you this Madras High Court order today. Please see