Custom, Excise & Service Tax Tribunal
M/S. Binjrajka Steel Tubes Ltd vs Cce, Hyderabad on 19 August, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Bench Division Bench
Court I
Appeal No.E/277/2008
(Arising out of Order-in-Appeal No.25/2008 dt. 28/03/2008
passed by CCE(Appeals), Hyderabad)
For approval and signature:
Honble Ms. Sulekha Beevi, Member(Judicial)
Honble Mr. Madhu Mohan Damodhar, 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?
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3.
Whether their Lordship wish to see the fair copy of the Order?
4.
Whether Order is to be circulated to the Departmental authorities?
M/s. Binjrajka Steel Tubes Ltd.
..Appellant(s)
Vs.
CCE, Hyderabad
..Respondent(s)
Appearance
Shri G. Prahlad, Advocate for the appellant.
Shri Nagraj Naik, Deputy Commissioner(AR) for the respondent.
Coram:
Honble Ms. Sulekha Beevi, Member(Judicial)
Honble Mr. Madhu Mohan Damodhar, Member(Technical)
Date of Hearing:19/08/2016
Date of decision:19/08/2016
FINAL ORDER No._______________________
[Order per: Madhu Mohan Damodhar]
Brief facts are as under:
a. The appellants are engaged in the manufacture of steel tubes, hot rolled strips etc. Central Excise Audit team visited the premises of the appellants and verified the records in 2003 and thereafter, an audit note was issued in 31.01.2005, which inter alia raised question of includability of amount collected towards collection charges in the assessable value for the purpose of payment of duty during the period 2003-04. No action was taken by the department subsequent to the issuance of the audit report. However, the Appellants were directed by the department to discharge duty liability amounting to Rs.19,44,379/- and the same was done by them on 31.03.2006. The appellants lodged their protest to the said payment as the same was done without issuance of any Show Cause Notice and no proceeding had been initiated by the department. Thereafter, department issued another letter dated 20.02.2007 directing the appellants to discharge the interest on the amount deposited by them. The appellants were issued a Show Cause Notice dated 29.09.2007, inter alia, demanding differential duty of Rs. 2,72,507/- on the ground that though the appellants have received an additional consideration amounting to Rs. 58,54,151/-, however, they have discharged duty liability only on Rs. 41,17,675/-. On this ground, recovery was proposed to demand differential duty payable by the appellant with respect to additional consideration received towards collection charges during the period from September 2002 to March 2007.
b. Adjudicating authority passed Order-in-Original dated 06.02.2008, confirming the proposals in the SCN. Aggrieved by the Order-in-Original, the Appellant filed an appeal before the Commissioner (Appeals) which also got dismissed vide Order-in-appeal dated 28.03.2008. Hence this appeal.
2. On behalf of the appellant, the Ld. Advocate Mr. G. Prahlad, submitted that in the first place collection charges are post sale expenses which were incurred for collection of payments relation to sold goods, by way of travelling expenses, lodging, boarding after goods are delivered to customers. The second contention made by Ld. Counsel was although the department conducted audit in 9/2003, however they have issued the notice only on 29.09.2007 and such the demand is barred by limitation.
3. On behalf of department, the Ld. AR, Nagaraj Naik contended that the audit note cannot be taken as conclusive and that even the appellants paid the amount only in March 2006. For these reasons, the department was well within its right to invoke extended period.
4. We have heard both sides and gone through the appeal records.
5. As per the Annexure to the SCN, the following demands have been proposed and have been confirmed in the impugned order:
S.
No.
Period
Description of receipt
Amount of additional consideration received
Value on which duty was paid by the assessees
Amount on which duty not paid (Value not declared by the assessees)
Durty to be paid
Education Cess to be paid
1
2002-03
Collection Charges
16,69,708
14,39,400
2,30,308
36849
-
2 2003-04 Collection charges 31,49,761 27,32,275 4,17,486 66798
-
32004-05 Collection charges 9,05,065
-
9,05,065 1,44,810 2896 4 2004-05 Weighment difference 11930
-
11930 1909 38 5 2005-06& 2006-07 Rate Difference 1,17,687
-
1,17,687 18830 377 Total 58,54,151 41,71,675 16,82,476 2,69,196 3,311
6. The addition of collection charges, weighment difference and rate difference are very much in the nature of additional consideration and hence required to be included in the assesable value for the discharge of excise duty.
7. Coming to limitation, the audit of appellant was conducted in 9/2003 and audit note also is issued on 31.01.2005. The quantifying the collection charges collected in 2003-04 as amounting to Rs. 31,69,437/- and having directed JRO to verify the issue in detail and take necessary action to safeguard the revenue, department cannot then take its own sweet time to issue notice on 29.09.2007 i.e., after a lapse of more than four years of the audit. We therefore are of the view that appellant does have a case on the issue of limitation, and that SCN and hence the demand revised in the impugned order is time barred except for the normal period of demand immediately preceding the date of service of Show Cause Notice. For the same reasons, the penalty imposed under Rule 25 is also set aside.
8. In the circumstances, we hold that the demand raised beyond the normal period, is hit by limitation and unsustainable. The impugned demand for the normal period along with interest thereof is sustained and the jurisdictional, Range Superintendent is directed to re-quantify the amount of duty and interest thereof for the normal period.
9. In the result, the appeal is partly allowed with consequential reliefs, if any. (Operative part of this order was pronounced in court on conclusion of the hearing) (MADHU MOHAN DAMODHAR) MEMBER(TECHNICAL) ( SULEKHA BEEVI, C.S.) MEMBER(JUDICIAL) Raja..
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