HC rejects Sterlite's contempt plea against excise officials

The Madras High Court has dismissed Sterlite Industries' contempt plea against four central excise officials for the arrest of a top executive of the company in July 2010.

Dismissing the petition, Justice RS Ramanathan said the high court's stay order pertained to Cenvat credit proceedings whereas the arrest of Sterlite Vice-President (Indirect Tax) S Varadharajan was made for offences under the Customs Act 1962.

He observed that the Superintendent of Customs had stated that Sterlite "deliberately diverted" its copper products, manufactured out of inputs procured under Advance Licence scheme, to the domestic market, thereby, violating customs notifications and conditions of the Bond and Foreign Trade Policy.

The company had been charged with duty evasion of more than Rs 700 crore to the exchequer, he said, holding that the arrest had nothing to do with the case relating to Cenvat credit.

Sterlite had submitted that the court on July 22 last year had granted a stay on the proceedings relating to an order of the Assistant Commissioner of Excise, Tuticorin, directing the company to pay the Cenvat credit of Rs 315.91 crore, along with interest.

But the company Vice President was arrested next day and hence contempt proceedings should be initiated against the four officials, including Commissioner of Central Excise (Tirunelveli) S Kannan, the petitioner contended.