Custom, Excise & Service Tax Tribunal
Iti Ltd vs Commissioner Of Central Excise, ... on 28 July, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeals(s) Involved: E/2385/2012-SM [Arising out of Order-in-Appeal No. 40/2012 dated 5.6.2012 passed by Commissioner Of Central Excise, Customs and Service Tax, Cochin.] For approval and signature: HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes ITI LTD KANJIKODE WEST, PALAKKAD 678 623 Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax CALICUT CENTRAL REVENUE BUILDING, MANANCHIRA, CALICUT, KOZHIKODE, - 673001 KERALA Respondent(s)
Appearance:
Mr. B. V. Kumar, Advocate No.103, 17th C Main Road, 5th Block, Koramangala, Bangalore 560 095. For the Appellant Mr. S. Teli, Dy. Commissioner (AR) For the Respondent Date of Hearing: 25/06/2015 Date of Decision: 28/07/2015 CORAM:
HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER Final Order No: 21703/2015 Per : ARCHANA WADHWA The appellant is engaged in the manufacture of telephone exchanges and other items of such equipments and was clearing the same to the Department of Telecommunication in terms of the purchase orders placed by various customers. The said purchase orders contained price escalation/ de-escalation clauses. On that account, the assessments were kept provisional for the period 1.4.2002 to 31.3.2003. Further, as and when there was escalation in the price, the appellants were raising supplementary bills and were immediately paying duty on the basis of the said supplementary bills.
2. The provisional assessments were subsequently finalized. The dispute in the present appeal relates to the interest demand of Rs.5,14,846/- in respect of clearances effected by the appellant prior to finalization of the assessment.
3. Though the appellant, relied upon Bombay High Court decision in the case of CCE, Nagpur vs. Ispat Industries Ltd.: 2010 (259) E.L.T. 662 (Bom.) as also to the Honble Karnataka High Courts decision in the case of CCE, Bangalore-III vs. BHEL: 2010 (257) E.L.T. 369 (Kar.), in support of their contention that inasmuch as they have paid the entire duty, even before the finalization of the provisional assessments and as such, no interest liability would arise, the Commissioner (Appeals) has not followed the said decision and by referring to the provision of Rule 7(4) of the Central Excise Rules, 2002 held that the interest liability would start from the succeeding month, during which the clearances were made, till the actual payment of duty on the escalated value.
4. Learned advocate appearing for the appellant has relied upon various decisions of the High Courts. However, for the purpose of disposal of the appeal, reference can be made to the Larger Bench decision of the Tribunal in the case of Cadbury India Ltd. vs. Commissioner of Central Excise & Customs, Pune-I: 2008 (232) E.L.T. 224 (Tri.-LB). The Larger Bench, after considering the provisions of Rule 7(4) as also the various contra decisions given by the judicial as also quasi-judicial authorities held that the interest liability would start from first day of the month succeeding the month in which the appellant was liable to pay the duty. The Larger Bench has rejected the assessees stand that the interest liability would stand running from the first day of the month succeeding month in which assessment is finalized. Accordingly Larger Bench held against the assessee.
5. However, in a subsequent decision the Honble High Court of Bombay, in the case of Ceat Ltd. vs. Commissioner of Central Excise & Customs, Nasik: 2015 (317) E.L.T. 192 (Bom.) had the occasion to deal with the said issue. The Honble Bombay High Court considered the Tribunals Larger Bench decision in the case of M/s. Cadbury India Ltd. (supra) and disapproved the same. Accordingly, the Honble Bombay High Court held that liability to pay interest arises on any amount payable consequent to final assessment under Rule 7(3) of the Central Excise Rules.
6. In view of the above, I find that the Larger Bench decision of the Tribunal is no longer a valid law, as held by the Honble Bombay High Court. Accordingly by following the Bombay High Courts decision, I set aside the impugned order and allow the appeal with consequential relief to the appellant.
(Order pronounced in open court on 28/07/2015.) ARCHANA WADHWA JUDICIAL MEMBER rv 2