Custom, Excise & Service Tax Tribunal
M/S. L.N.M. Auto Industries Pvt. Ltd vs Cce, Delhi-Iv on 22 March, 2012
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066. BENCH-,,,,,SM Date of Hearing/Decision:22.03.2012 Excise Appeal No.E/44/10-SM M/s. L.N.M. Auto Industries Pvt. Ltd. Appellant Vs. CCE, Delhi-IV Respondent
Present for the Appellant :Shri.K.L.Handa, Consultant Present for the Respondent:Shri.K.K.Jaiswal, DR Coram: HONBLE MR.DN.PANDA, JUDICIAL MEMBER ORDER NO. _______________ DATED:22.03.2012 PER: D.N.PANDA The appeal involves 2 disputes. One is against levy of interest of Rs.70,461/- as against duty demand of Rs.1,20,902/- and second dispute is whether additional customs duty of Rs.1,30,024/- is payable from DEPB account. Shri Handa fairly states that as against the interest demand, Rs.30,000/- has been deposited and rest of the interest shall be deposited by the appellant. In respect of the second dispute his submission is that when there was no denial in law to discharge additional customs duty liability from DEPB account, that cannot be forced to be discharged by cash. The DEPB account was debited on 4.1.03 and 6.2.03 for aggregate amount of Rs.1,30,024/-. Appellants stand was supported by decisions of the Tribunal made on 25.11.2002 and 5.12.02. But such favourable decision could not sustain by a Larger Bench decision made against assessee on 16.8.04. Audit was done to the appellants factory on 20th & 21st May, 2004 which gave rise to the allegation. There was a notification No.96/04 dated 17.9.04 made under section 25 of the Customs Act 1962 granting express right to avail drawback or cenvat credit even if additional customs duty is discharged through DEPB account. So also Honble High Court of P & H in the case of CCE, Ludhiana vs. Neel Kant Rubber Mills reported in 2010 (254) ELT 203 (P &H) held that the additional duty liability discharged from DEPB account is permissible and the respective cenvat credit is permissible. Consequently, the appellant is entitled to relief on the demand of Rs.1,30,024/-.
2. On the other hand Revenues contention is that there was nothing favourable to assessee on the date of discharge of the additional custom duty liability. Rather the EXIM Policy did not permit availing cenvat credit or draw back in respect of additional customs duty paid from DEPB account.
3. Heard both sides and perused the record.
4. When the appellant does not disagree to discharge the rest of the interest demand of Rs.40,461/- there is nothing more to dialate that issue except confirming interest demand of Rs.70,461/- and subject to verification of Rs.30,000/- on that account pleaded to have been paid. That is ordered accordingly.
5. So far as the disallowance of credit of Rs.1,30,240/- is concerned, which is arising out of discharge of additional customs duty from DEPB account, it was not shown by Revenue how such a denial is permitted by express provision of law. No doubt, the Notification No.96/04-Cus. was issued on 17.9.2004. But the chronology of dates submitted by ld. Consultant, as aforesaid throws light that law was in confusion stage at both end. That was resolved by decision of Honble High Court of Punjab and Haryana in the decision cited by the appellant. In absence of specific provision of law, there cannot be any artificial construction of law, that can be made to make law unworkable. By this, it is not stated that all payments through DEPB account is permissible. There is no dispute about the bonafide of the DEPB credit availablein the present case. The express intention through the notification is certainly at a later date that is from 17.9.04. But when the bonafide of the appellant is not doubted and law was under confusion stage as aforesaid, following decision of Honble High Court of Punjab & Haryana, authority cannot proceed against the appellant to disallow cenvat credit of Rs.1,30,024. On such count the appellant succeed. The Notification issued granting benefit shall be operative from the date it is issued, which is the law laid down by Apex Court in the case of Sunwin Technologies 2011 (21) STR 97 (SC). Following the ratio of that judgement, the appellant ought to have been denied benefit, but for the confusion of law, as stated aforesaid, the appellant was also in dark to ascertain the proper position of law, in view of travel of the litigations from 2002 to 2010 from Tribunal to High Court. Therefore, noticing no malafide, the appellant also succeeds on limitation.
6. In the result, appeal is allowed partly.
[Dictated & Pronounced in the open Court].
(D.N.PANDA) JUDICIAL MEMBER Anita