Customs, Excise and Gold Tribunal - Delhi
Nehru Steel vs Cce on 21 August, 2006
Equivalent citations: 2006(112)ECC365, 2006ECR365(TRI.-DELHI), 2007(207)ELT129(TRI-DEL)
ORDER M.V. Ravindran, Member (J)
1. This appeal is directed against Order-in-Appeal dated 23.4.2004 which allowed the appeal of the appellant partly and reduced the penalty imposed by the adjudicating authority.
2. The relevant facts that arise for consideration are that the appellants are manufacturer of inserts and steel castings and were supplying the same to their customers based on contracts. In the purchase contract there was a clause for escalation of price of goods. Hence, the appellant raised supplementary invoices during the period 2000-01 for the escalation of prices. The appellant raise supplementary invoices for the clearances made during the period 1997-98 to 1999-2000. During the period May, 2000 to September, 2001 the appellant deposited the amount partly from PLA and partly from RG-23A, Part-II. Show cause notice was issued to the appellant on the ground that they have not indicated the issuance of supplementary invoices for the earlier period, and hence have suppressed the information from the department, and they had no balance in the CENVAT and as well as PLA during the relevant period when the supplementary invoices were raised. The show cause notice sought to raise the demand of Rs. 4,57,000/-. The adjudicating authority confirmed the demand and also imposed equivalent penalty. He also ordered recovery of interest at the appropriate rate. On appeal the Commissioner (Appeals) has given relief to the appellant to the tune of Rs. 2,35,295/- but confirmed the demand of Rs. 2,21,911/- and also upheld the imposition of penalty and demand of interest. Hence, this appeal.
3. Learned Advocate appearing on behalf of the appellant submits that for the supplementary invoices raised during the period May, 2000 to July 2000 they debited the amount through RG-23A, Part II and PLA on various dates which were in the month of May, 2000, September, 2000, February, 2001 and March, 2001 and indicated the same in RT-12 Returns filed to the department. It is his submission that demand for this period is totally time barred in as much the show cause notice is issued to them on 24.7.2001 which was beyond the period prescribed under the provisions of Central Excise Act. As regards the duty payment for the supplementary invoices raised during 16th July, 2000 to 31st August, 2000 it is his submission that they have paid the duty in the month of September, 2001 and that that credit balance was available with them in RG 23, Part II. As regards penalty imposed on the duty paid before the issuance of show cause notice it is his submission that the amount of duty has been paid before the issuance of show cause notice, and hence no penalty is imposable as held by the Larger Bench of the Tribunal in the case of CCE, Delhi-III, Gurgaon v. Machino Montell (I) Ltd. as reported at .
4. Learned D.R. on the other hand submits that the question of discharging the duty liability through RG23A, Part II does not arise as the appellant is required to pay the duty at the time of raising the supplementary invoices. Since they have not paid the duty for the period 16.7.2000 to 31.8.2000 the impugned order is correct there is absolutely no reason for interfering with the order.
5. Considered the submissions made at length by both sides and perused the record. I find from the record that the dispute is regarding duty liability not discharged by the appellant for the period 1.5.2000 to 31.8.2000 on the supplementary invoices raised by them. I find from the record that the appellant has supplied these items to the railway under a purchase contract and in the contract there is a clause for escalation of prices. The appellant has raised supplementary invoices during the relevant period. Rightly or wrongly the appellant has debited the amount of excise duty involved during the period (01-5.2000 to 16.7.2000 through RG23-A, Part II and PLA before the issuance of show cause notice. Since the amount had been paid before the issuance of show cause notice the amount debited through RG23A, Part II cannot be now said to have been not paid by the appellant. The debits in RG23A, Part II during the relevant period were fact that they have paid the duty belatedly, nevertheless the duty liability has been discharged. Asking them to pay the same amount of duty through PLA for the only reason that if they would have discharged the duty liability during the relevant period when it was due they would have to discharge the same through PLA is incorrect proposition. It is settled law that the debits in RG23A, Part II are as good as debit in PLA for the discharge of duty liability subject to the condition that there should be balance in the account. In the present case it is undisputed fact that in the month of March, 2001 and September, 2001 the appellant had credit of amount in RG23A, Part II. This being the case the Order-in-Appeal directing the appellant to deposit the amount of Rs. 2,21,911/- through PLA is liable to be set aside and I do so.
6. As regards penalty imposed on the appellant under Section 11AC for the entire amount of demand of duty I find that the amount of duty discharged by the appellant prior to the show cause notice is covered by the decision of the Larger Bench of the Tribunal in the case of Machino Montell (supra). Hence, equivalent amount of penalty imposed on the done after ascertaining the balance on those dates. The department's case is that the appellant should have paid the duty during the relevant period when they raised the supplementary invoices. Though this may be correct, the fact that the appellant has on their own deposited the amount can not be brushed aside. Hence, the Commissioner (Appeals) finding that debits made by the appellant prior to the issuance of show cause notice through RG23A, Part II are valid debits, cannot be faulted and is a correct legal position. As regards payment of duty for the period 16.7.2000 to 31.8.2000 for he supplementary invoices raised by the appellant, I find that the appellant has discharged the duty liability through debits in RG23A, Part II in the month of March, 2001 and September, 2001. It is not alleged nor also is the contention of the Revenue that when the duty was paid in March, 2001 and September, 2001 there was no balance in RG23A, Part II account. Since this allegation or contention is not raised in the show cause notice as well in the Order-in-Original, it has to be presumed that the appellant had balance in their RG23A, Part II when they debited the amount. Though it may be a appellant for the amount of duty liability discharged by them prior to issuance of show cause notice is liable to be set aside. Further, the appellant has deposited the entire amount of duty involved in this case in the month of March, 2001 and September, 2001 during the pendency of proceedings. The adjudicating authority confirmed the demand vide his Order-in-Original dated 31.10.2001. Hence, penalty imposed on the appellant for the discharge of duty liability subsequently has to be considered from the angle that they had every intention to pay the amount, which is very evident as they have issued supplementary invoices may be due to mis-understanding of the law they did not debit the amount. Hence this itself cannot indicate any intention to evade payment of duty and visit them with that equivalent amount of penalty under Section 11AC. In view of the facts and circumstances, as indicated I reduce the penalty imposed on the appellant to Rs. 20,000/-.
7. As regards interest charged from the appellant, I find that provisions of Section 11AB are applicable and the appellant is liable to pay the interest at appropriate rate under Section 11AB for the period from the duty liability is due to till they the date the duty liability is discharged by them.
8. Accordingly the appellant's appeal is allowed partly in above terms, as indicated.