Punjab-Haryana High Court
Commissioner Of Central Excise vs M/S Ralson Carbon Black Ltd on 18 August, 2009
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH.
CEA No. 69 of 2009
Date of Decision: August 18, 2009
Commissioner of Central Excise, Ludhiana
...Appellant
Versus
M/s Ralson Carbon Black Ltd.
...Respondent
CORAM: HON'BLE MR. JUSTICE M.M. KUMAR
HON'BLE MR. JUSTICE JASWANT SINGH
Present: Mr. Sanjeev Kaushik, Senior Standing Counsel,
Government of India (Indirect Taxes),
for the appellant.
1. Whether Reporters of local papers may be Yes
allowed to see the judgment?
2. To be referred to the Reporters or not? Yes
3. Whether the judgment should be reported in Yes
the Digest?
M.M. KUMAR, J.
This order shall dispose of C.E.A. Nos. 69, 70 and 71 of 2009 as common question of law and facts are involved. The revenue-appellant has filed these appeals under Section 35-G of the Central Excise Act, 1944 (for brevity, 'the Act') challenging common final order dated 6.6.2008, passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for brevity, 'the Tribunal) claiming that the following substantial questions of law would arise for determination of this Court:-
"1. Whether the Tribunal can go beyond the statutory provisions as provided under the Central Excise CEA No. 69 of 2009 2 Rules, 2002?
2. Whether the Tribunal can modify the mandatory penalty period of two months provided under Rule 8 of the Central Excise Rules, 2002, in cases where it is established that the assessee had defaulted in payment of monthly duty in contravention of the provisions of Rule 8 of the Rules thereby attracting the provisions of Rule 8(3A) of the Rules?"
Facts may first be noticed, which have been referred from C.E.A. No. 69 of 2009. The assessee-respondent, who is a manufacturer of Steel Pipes & Tubes falling under Chapter 73 of the first schedule to the Central Excise Tariff Act, 1985 (5 of 1986), was required to discharge duty liability on the finished goods in terms of Rule 8 of the Central Excise Rules, 2002 (for brevity, 'the Rules'). The assessee-respondent committed default in payment of duty liability for the month of July 2005 and failed to pay the same within the period as stipulated under sub-rule (1) of Rule 8 of the Rules. It had filed the return of Rs. 30,34,852/- for the month of July, 2005, whereas paid the duty of Rs. 20,61,091/- only through Cenvat Credit account. In this manner, there was a default of Rs. 9,73,661/- in discharge of duty liability for the month of July 2005. On 9.3.2006, the Assistant Commissioner, Central Excise Division, Sangrur- Adjudicating Authority issued a show cause notice to the assessee- respondent. On 26.7.2006, exercising the powers under Rule 8(3A) of the Rules, the Adjudicating Authority ordered forfeiture of the liability of payment of duty on monthly basis, which was available to the assessee-respondent under Rule 8(1) of the Rules, for a period of CEA No. 69 of 2009 3 two months starting from the date of communication of the order or till such date on which all duties were paid (A-1).
The order of the Adjudicating Authority was challenged in appeal by the assessee-respondent before the Commissioner (Appeals) on the ground that the default in discharge of duty was caused due to the fact that the assessee-respondent Company was declared as a sick unit by the BIFR and it has been facing grave financial crisis. It was further pleaded that the duty was already deposited on 18.1.2006 even prior to issuance of show cause notice on 9.3.2006 and passing of order dated 26.7.2006 by the Adjudicating Authority. On 17.8.2006, the Commissioner (Appeals) came to the conclusion that the order passed by the Adjudicating Authority was too harsh and reduced the period of forfeiture from two months to three weeks from the date of communication of order dated 26.7.2006 or till such date all the dues were paid, whichever is later (A-2).
The revenue-appellant filed further appeal before the Tribunal challenging the order-in-appeal dated 17.8.2006. A number of appeals on the same issue were filed before the Tribunal, as such the same were clubbed together. The Tribunal has divided the appeals into two groups. In the first group it has dealt with the case of M/s Ralson Carbon Black Ltd. wherein there was delay of 36 to 54 days in discharge of payment of duty in different appeals and the delay was caused because the Company was facing grave financial crisis and it was declared as sick unit by the BIFR. The Tribunal after noticing the judgment of Andhra Pradesh High Court rendered in the case of CCE, Guntur v. Andhra Cement Ltd., 2007 (216) ELT 362 (A.P.) allowed the aforementioned appeals by holding that forfeiture CEA No. 69 of 2009 4 of facility for two months was excessive and the Commissioner (Appeals) has rightly reduced the same to three weeks. The second set of appeals consist of the cases of M/s Shiv Shakti Concast (P) Ltd. and M/s Bhiwani Tubes (P) Ltd. wherein they committed default of payment of duty but later on paid the duty along with interest. While dealing with said cases, the Tribunal has relied upon the judgment of Gujarat High Court rendered in the case of Banian & Berry Bearing Pvt. Ltd. v. Union of India, 2002 (52) RLT 755 (Guj.) and came to the conclusion that since the assessee have paid the substantial amount within due date and subsequently paid the balance duty with interest, therefore, the Commissioner (Appeals) has rightly reduced the period of forfeiture facility from two months to one month. Accordingly, the Tribunal has dismissed all the appeals preferred by the revenue, vide impugned order dated 6.6.2008 (A-3).
We have heard learned counsel for the revenue-appellant and perused the paper books with his able assistance. It is conceded position that in all these appeals the assessee-respondent(s) have paid the substantial duty in time and the balance has also been paid with interest. Therefore, hardly any loss has been caused to the revenue. We see no ground to interfere with the order passed by the Tribunal warranting admission of these appeals. In so far as the questions of law sought to be raised by the revenue-appellant are concerned, we leave the same open to be decided in some appropriate case. Accordingly, the appeals are dismissed.
(M.M. KUMAR)
JUDGE
CEA No. 69 of 2009 5
(JASWANT SINGH)
August 18, 2009 JUDGE
Pkapoor