753 Crores Evasion Case on Steel Major - High Court Does not interfere at Show Cause Notice Stage
A steel unit was issued a demand notice for Rs. 753.55 Crores alleging suppression and evasion for the period from 2010-11 to 2013-14. It was a discovery during audit that the production figures did not match with the production capacity and so the notice of evasion of Rs. 750 crores. What was the department doing for five years when the assessee was merrily evading hundreds of crores? To evade 750 crores of excise duty, you have to clear at least 7500 crores worth of material. Assuming the price of steel to be Rs. 25,000, they have to clear 30 lakh tons of steel. Did so much of steel simply vanish into thin air?
The assessee approached the High Court for quashing the Show Cause Notice as it did not contain a single justifiable reason for the purpose of issuing the notice.
The High Court however did not oblige, but asked the assessee to file its objections with the department within two weeks and the adjudicating authority to pass appropriate orders within six weeks thereafter. Please see
Now, what will happen if the Commissioner confirms the demand? This assessee has to just pay Rs.10 crores as pre-deposit for filing the appeal in the CESTAT. This may not be difficult for this assessee who pays about Rs. 3500 crores annually as excise duty.