Custom, Excise & Service Tax Tribunal
M/S. Scorpio Engineering Pvt. Ltd vs Cce, Bangalore on 18 January, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing: 16/12/2009
Date of decision:..
Appeal No.E/335/05
(Arising out of Order-in-Appeal No.194/2004-Central Excise dt. 14/12/2004 passed by CCE(Appeals), Bangalore )
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
Honble Mr. P.Karthikeyan, Member(Technical)
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?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Scorpio Engineering Pvt. Ltd.
..Appellant(s)
Vs.
CCE, Bangalore
..Respondent(s)
Appearance
Mr.Ashok Deshpande, Advocate for the appellant.
Ms.Joy Kumari Chander, Jt.CDR for the Revenue.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial)
Honble Mr. P.Karthikeyan, Member(Technical)
FINAL ORDER No._______________________2009
Per M.V.Ravindran
This appeal is listed today for disposal before us on the direction of the Honble High Court of Karnataka in Central Excise Appeal No.15/2006.
2. This appeal is filed by the appellant against the Order-in-Appeal No.19/4/2004-Central Excise dt. 14/12/2004. The said appeal came up for disposal before this Bench on 24/6/2005 on which date, the Bench after considering the fact that the appellant has paid the duty demanded, before issuance of show cause notice, set aside the penalties imposed on them and also set aside the demand for interest. The Revenue being aggrieved by such an order preferred an appeal to the Honble High Court of Karnataka in Central Excise appeal No.15/2006 which was disposed by the Honble High Court by judgment dt. 11/4/2007, which is reproduced as under:-
JUDGMENT
The facts, grounds and the questions of law raised in this appeal are same or similar to the facts, grounds and questions of law raised in CEA No.43/2006.
We have partly accepted CEA No.43/2006 in terms of our order dated 4-4-2007.
In these circumstances, this appeal is also partly accepted in terms of our order dtd. 4-4-2007 passed in CEA No.43/2006. Question of law in so far as penalty is concerned is answered against the revenue and in so far as interest is concerned, the same is not answered. Matter is remitted back to the tribunal only for consideration of interest only for the delayed period. Parties are directed to appear before the tribunal on or before 30-4-2007. The tribunal is directed to complete the proceedings within six months from the date of receipt of a copy of this order.
3. Consequent to the direction by the Honble High Court, this appeal is listed for hearing by us.
4. Ld. Counsel submits that the Honble High Court has directed the Tribunal to only consider the demand of interest for the delayed period. He would submit that no interest is paid as the period involved is between September, 1999 to December, 2001 and the provisions of Section 11AB get attracted only to the ingredients mentioned therein during the relevant period. It is his submission that prior to 11/5/2001, provisions of Section 11AB were attracted only if the demand is confirmed on suppression of fact, mis-statement, fraud or collusion with intention to evade payment of duty. He would submit that in this case, there are no findings to the effect that these ingredients were present.
5. Ld. Jt.CDR on the other hand would argue that the question of imposition of penalty would also arise. It is her submission that the Revenue has preferred an appeal against the order of the Tribunal, wherein they have specifically raised the question regarding the penalties also. She would draw our attention to the question of law which has been raised by the Revenue before the Honble High Court in their Central Excise appeal No.15/2006. She would submit that the appellant is liable to pay penalty and interest also.
6. We have considered the submissions made by both sides and perused the records. The issue involved in this case is regarding the demand of interest on the appellant, to be considered by us as directed by the Honble High Court. On the plain reading of the judgment of the Honble High Court , we find that the Honble High Court has remanded the matter to us only in respect of demand of the interest for the delayed period. As regards the penalty, there is a clear cut finding that the question is answered against the Revenue. In view of this, we take up the appeal for disposal only on the question, that, whether the interest is liable to be paid by the appellant on the demand which has been confirmed by the adjudicating authority for the period September, 1999 to December, 2001.
7. At the outset, we would like to reproduce the findings of this Bench, when they disposed off the appeal vide Final Order No.1001/2005 dt. 24/6/2005:-
5. On a careful consideration of the submissions made by both the sides and on going through the records, we find that even though the ground in the show cause notice for includability of design/development charges is that they are additional considerations, in the Order-in-Original, there was no discussion on the issue. Rule 6 of the Central Valuation Rules relies on additional considerations. There was no discussion on that point. The adjudicating authority says that there is mutuality of the interest between the appellants and M/s. Optimum Bulk Handling. In view of this, the adjudication order goes beyond the scope of the show cause notice. Hence, on this account, the Order-in-Original is defective and has not merit. Therefore, the impugned order is set aside. .. . . (Emphasis supplied)
8. It can be noticed from the above reproduced findings of this Bench that the entire impugned order is set aside by the Tribunal, on merits. On mere perusal of the Central Excise appeal filed by the Revenue before the Honble High Court, it is seen that the Revenue had carried the question of non-imposition of penalty before the Honble High Court. They have not questioned the order of the Tribunal on the merits which very evident from the following grounds of appeal taken by the Revenue before the Honble High Court.
In view of the facts of the case narrated above, it appears that the Honble Customs, Excise & Service Tax Appellate Tribunal, Bangalore has erred in Law while granting immunity from reversal of wrongly availed cenvat credit, penalty and interest, when the assessee had paid the duty prior to the issue of the Show Cause Notice, that too, when the duty was paid after the Department had pointed out the evasion by invoking the suppression clause. With regard to additional consideration, the Honble Tribunal has let-off the party on mere technicalities, which is not justified in the facts and circumstances of the case.
2. The Honble Tribunal had erred in law while not considering the provisions of Sections 11A, 11AB and 11AC where the assessee opts for payment of duty subsequent to the detection by the Department that too, when the proviso to Section 11A has been invoked.
3. The Honble Tribunal has erred in law while not considering the decision of the Honble Supreme Court in the case of Zunjarrao Bhikaji Nagarkar Vs Union of India 1999 (112) ELT 772 (SC) that it is not the intent of law to provide protection and shelter to those assessees- who first indulge in duty evasion by clandestine removal and thereafter seek to deposit duty by accepting liability.
4. In view of the above, the Final order No.1001/2005 dated 24.06.05 passed by the Customs, Excise & Service Tax Appellate Tribunal, Bangalore, is not legal and proper and, therefore, the Tribunals order needs to be set aside and the order passed by the Commissioner of Central Excise(Appeals), Bangalore vide OIA No 194/2004 dated 4.1.2005 needs to be upheld.
9. It can be noticed from the above reproduced grounds of appeal taken by the Revenue before the Honble High Court, that they have never challenged the order of this Bench on merits, which has set aside the impugned order with the findings that the demand is not sustainable. In view of this, we are of the considered view that once the impugned order is set aside on merits and it has been held that there is no sustainable demand, the question of demand of interest does not arise, in the absence of any appeal against such an order.
10. Accordingly, in view of the above reasoning, we hold that the appellant is not liable to pay any interest as held by the adjudicating authority. The impugned order is set aside and appeal is allowed.
(Pronounced in court on ..) (P.KARTHIKEYAN) Member (Technical) (M.V. RAVINDRAN) Member (Judicial) Nr 6