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Informist, Monday, May 18, 2026

 

NEW DELHI – The Supreme Court Monday admitted a plea by the excise department against Eletrosteel Castings Ltd. alleging that the company incorrectly claimed exemption under the government's notifications in 2002 for sale of ductile iron pipes that resulted in non-payment of excise duty. The excise department has challenged a Customs, Excise and Service Tax Appellate Tribunal's order that rejected the department's excise demand and penalty against Electrosteel Castings and top officials, respectively. 

 

Electrosteel Castings is engaged in the manufacture and sale of ductile iron pipes, which are used for transportation of water. The company had supplied ductile iron pipes to various central and state government departments executing drinking water projects for human or animal consumption in different parts of the country and claimed an exemption of the government's notification from paying excise duty.

 

The excise department said Electrosteel Castings had incorrectly availed exemption for pipes for usage beyond the first storage point, for usage where a water treatment plant does not exist and where the actual usage was different from the intended use. The excise department said Electrosteel Castings had recovered excise duty from consumers while operating under the government's notifications, which was not valid. Initially a notice was issued for a proposed demand of INR 494.85 million, and this was later reduced to INR 220.93 million.

 

The appellate tribunal said Electrosteel Castings was entitled to the benefit of exemption as per the 2002 notifications. Further, the invoices raised by Electrosteel Castings do not indicate collection of any duty from its customers, the appellate tribunal said. Consequently, it quashed the demand and penalty against Electrosteel Castings and its top officials. Challenging the order, the excise department moved the apex court.

 

At 1232 IST, shares of Electrosteel Castings Ltd. were down 5.4% at INR 77.55 on the National Stock Exchange.  End 

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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