Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S. Tata Motors Ltd on 16 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.E/7/2008, CO-32/08
(Arising out of Order-in-Appeal No.26/JSR/2007 dated 26.09.2007 passed by the Commissioner (Appeals) Central Excise & Service Tax, Ranchi)
FOR APPROVAL AND SIGNATURE
Honble Shri H.K.Thakur, Member (Technical)
Honble Shri P.K.Choudhary, Member (Judicial)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
Commissioner of Central Excise, Jamshedpur
Applicant (s)/Appellant (s)
Vs.
M/s. Tata Motors Ltd.
Respondent (s)
Appearance:
Shri S.S.Chattopadhyay, Suptd.(AR) for the Appellant (s) Shri Ravi Raghavan & Shri Tanmoy Chakraborty, Advocate for the Respondent (s) CORAM:
Honble Shri H.K.Thakur, Member (Technical) Honble Shri P.K.Choudhary, Member (Judicial) Date of Hearing:-16.09.2016 Date of Pronouncement :- 23.09.16 ORDER NO.FO/A/76060/2016 Per Shri H.K.Thakur
1. This appeal has been filed by the Revenue against Order-In-Appeal No.26/JSR/2007 dt. 26.09.2007 passed by the CCE & ST (Appeals), Ranchi as First Appellate Authority. Under this OIA dt. 26.09.2007 First Appellate Authority has set aside the OIO dt. 28.12.2006 passed by the Adjudicating Authority under OIO No.17/Add.Comm/2006 dt. 28.12.2006 Adjudicating Authority confirmed a demand of Rs.34,80,000/- under Section 11A of the Central Excise Act 1944, alongwith interest, and also appropriated the duty and interest already paid by the respondent herein. In addition to above equivalent amount of penalty was also paid under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944.
2. Shri S.S.Chattopadhyay, Suptd.(AR) appearing on behalf of the Revenue argued that it was not open to the Commissioner (Appeal) to decide the issue of classification for the duty of Rs.34,80,000/- paid voluntarily for the clearances made in March, 2003. That only differential duty was demanded and classification of goods was not decided by the Adjudicating Authority under OIO dated 28.12.2006. That duty on 348 number of chassis in SKD/CKD condition were cleared by appellant after February, 2003 whereas duty was paid at 16% advalorem. That as per Finance Bill 2003 duty on chassis cleared under CETH 8706 was enhanced from 16% to 16%+Rs.10,000/- per chassis with effect from 01.03.2003. That the entire differential duty of Rs.34,80,000/-+Rs.60,800/- interest was paid by the Respondent on 19.04.2003 before the issue of show cause. That on 01.03.2004 department issued show cause not only demanding Rs.34,80,000/- duty and interest but also proposed imposition of penalties. That in paragraph-11 of the OIO dated 28.12.2006 Adjudicating Authority has clearly held that classification issue cannot be re-opened. That deciding of classification was not the subject matter of the Adjudication and appellant also paid the entire differential duty and interest voluntarily. That when classification of goods was not the subject matter of the proceedings then First Appellate Authority has gone beyond the scope of adjudication proceedings while favourably deciding the classification of goods manufactured by the respondent.
3. Shri Ravi Raghavan (Advocate) and Shri Tanmoy Chakraborty (Advocate) appeared for hearing on behalf of the respondent. Shri Ravi Raghavan argued that classification of their product manufactured and cleared in CKD/SKD condition from various divisions of the respondent are classifiable under Central Excise Tariff Heading (CETH) 87.08. That by a letter dated 10.09.2003 his client wrote to the jurisdictional commissioner that their product is classifiable under CETH 87.08 and that their competitors like M/s. Ashok Leyland Co. are also classifying the same goods under CETH 87.08. That by another letter dt. 10.10.2003 respondent also sent a letter to CBEC on the same issue. That department vide another show cause notice dt. 31.1.2006, for the period 15.09.2005 to 30.11.2005, demanded duty of Rs.1,43,61,600/- on the same issue that CKD/SKD units are classifiable under CETH 8706. That by an OIO No.08/Commr/06 dt. 29.08.2006 Adjudicating Authority confirmed demand of Rs.1,43,61,600/-. That on appeal by Final Order No.A-1547/Kol/07 dt.09.08.2007 this bench held that the goods manufactured from various divisions of the respondent are classifiable under CETH 87.08 and not under CETH 87.06 as claimed by the department. That Revenue filed a ROM with respect to the said order dt. 09.08.2007 passed by CESTAT and CESTAT vide Order No.M-99/Kol/08 dt. 27.03.2008 denied rectification sought by the Revenue related to the classification. That vide order dt. 13.08.2008 Honble Supreme Court dismissed the departments appeal and did not interfere with the Final Order dt. 09.08.2007 passed by CESTAT. That department filed a review petition in the Apex Court but the same has also been dismissed by Supreme Court as per order dt. 13.07.2009.
3.1. That the present appeal has been filed by the Revenue against OIA dated 28.12.2006 based on CESTAT Order No.A-1547/Kol/2006 dt. 09.08.2007. That once departmental adjudication also confirmed duty liability of Rs.34,80,000/- under OIO dt. 28.12.2006 then respondent had every right to agitate the issue that duty at enhanced rate was not applicable as their goods were not classifiable under CETH 8706. That once classification is challengeable then the same has been correctly challenged before the First Appellate Authority with respect to OIO dt. 28.12.2006 and Commissioner (Appeal) has correctly decided the issue in their favour and no interference is called for in the said order.
4. Heard both sides and perused the case records. There was a dispute about the classification of parts cleared by the respondent whether under CETH 8708 or CETH 8706. For the period 15.09.2005 to 30.11.2005 this issue was decided by the Adjudicating Authority under OIO No.08/Commr./06 dt. 29.08.2006 which was set aside by CESTAT under Final Order No.A-1547/Kol/07 dt. 11.07.07 by holding that impugned goods cleared from different divisions of the respondent have to be assessed on merit in each case and not together as motor vehicle chassis in CKD/SKD condition. The order passed by this bench has reached finality. It is the case of the Revenue that Order No.A-1547/Kol/2007 dt. 09.08.2007 of this bench was only for the period 15.09.2005 to 30.11.2005 and has been wrongly applied by First Appellate Authority while allowing respondents appeal under OIA dt. 26.09.2007. On the other hand respondent has argued that show cause notice adjudicated by the adjudicating authority under OIO dt. 28.12.2006 was demanding, interalia, differential duty and respondent was at liberty to contest that differential duty, though paid with interest, was not leviable. Respondent was contesting this issue of non-levy of 16% +Rs.10,000/- per chassis rate before the issue of show cause notice dt. 01.03.2004. It is observed from paragraphs-2.8 and 2.9 of Final Order No.A-1547/Kol/07 dt. 09.08.2007 passed by this bench that appellant was corresponding with the department and contesting the classification of the impugned goods even before issue of show cause notice dt. 01.03.2004. The issue of classification of parts from various divisions of the respondent and applicable rate of duty was agitated by respondent before the adjudicating authority also but it was held, interalia, in OIO dt. 28.12.2006 that classification issue cannot be reopened. Revenue relied upon the case laws as mentioned in the grounds of appeal.
5. Respondent has relied upon the following case laws to argue that a classification once agreed upon by an assessee can be agitated:-
i) Collector of Central Excise, Baroda-vs.-Cotspun Ltd.[1999(113)E.L.T.353(S.C.)].
ii) Commissioner of Central Excise, Bhopal vs.- Perfect Refractories[2005(185)E.L.T.163(Tri.-Del.)]
iii) Compton Greaves Ltd. vs.- C.C.E., Aurangabad[1996(87)E.L.T.414(Tribunal)].
iv) Shon Ceramics Pvt. Ltd. vs.-Collector of Central Excise[1991(52)E.L.T.608(Tribunal)].
5.1. In the case of CCE Baroda -vs.-Cotspun Ltd.(Supra) Apex court has held as follows in paragraph-13:-
13. The levy of excise duty on the basis of an approved classification list is the correct levy, at least until such time as to the correctness of the approval is questioned by the issuance to the assessee of a show cause notice. It is only when the correctness of the approval is challenged that an approved classification list ceases to be such. 5.2. It is now a well accepted legal proposition that department can raise a demand within the prescribed time limit under Section 11A of the Central Excise Act, 1944 even if the order for original assessment or erroneously sanctioned refund is not challenged. On the same analogy and principles of equity appellant can seek refund of duty within the time period specified in Section 11B of the Central Excise Act, 1944. There is no time limit prescribed under the Central Excise, Act, 1944 to seek change in classification once approved by the department or accepted by an assessee. The issue of classification of the parts manufactured/cleared by the respondent for the period 15.09.2005 to 30.11.2005 in show cause notice dated 31.01.2006, was alive before the case was adjudicated under OIO dated 28.12.2006 by the Adjudicating Authority. The issue was finally decided in favour of the respondent as a result of Final Order No.A-1547/Kol/07 dt. 09.08.2007 for the period 15.09.2005 to 30.11.2005. We are of the considered opinion that a correct classification of appellants goods for the period 15.09.2005 to 30.11.2005 will be the correct classification for the period prior to 15.09.2005 or after 30.11.2005 so long as there is no change in the relevant CET headings. Before the issue of present show cause notice dt. 01.03.2004 respondent was seeking change in the classification of the impugned goods by writing letters to the department. Once department has chosen to demand duty in show cause notice dt. 01.03.2004, then respondent had every right to contest that differential duty demand as not payable due to incorrect classification even if duty was paid with interest. We do not find anything wrong in OIA dt. 26.09.2007 of the First Appellate Authority to hold the classification of parts cleared by the respondent under CETH 8708 by relying upon Final Order No.A-1547/Kol/2007 dt. 09.08.2007 passed by this bench.
6. It is further observed that ground (iv), taken in the grounds of appeal by the Revenue, is not valid now as order rejecting Revenues ROM has been finally upheld by Apex Court by dismissing Revenues appeal. The apprehension of the Revenue in ground (vi) of the grounds of appeal, that change in classification for the earlier period will tantamount to making re-assessment, is not the correct appreciation of law. As per Rule-2(b) of the Central Excise Rules, 2002 assessment includes self-assessment of duty made by the assessee and provisional assessment under Rule-7. At the same time it will also include self-assessment. Assessment or re-assessment is not restricted to only deciding classification of the goods manufactured by an assessee, but will also include deciding the valuation of goods and the rate of duty applicable. It will also include demands/refunds under Section 11A and Section 11B of the Central Excise Act, 1944 arising as a result of scrutiny and finalization of provisional assessments. The issue of deciding the classification of the respondents products does not mean that all the procedural requirements of assessment/re-assessment/self assessments have been changed. The provisions of Section 11B of the Central Excise Act, 1944 will have to be followed and satisfied if re-assessment has to be completed.
7. In view of the above appeal filed by the Revenue is dismissed so far as classification of the impugned goods is concerned by upholding the OIA dt. 26.09.2007.
(Pronounced in the open court on 23.09.2016) S/d. S/d.
(P.K.Choudhary) (H.K.Thakur) MEMBER MEMBER (JUDICIAL) MEMBER(TECHNICAL) ss 1 Appeal No.E/7/2008 , CO-32/08