Custom, Excise & Service Tax Tribunal
Tata Motors Ltd vs Cce Pune I on 1 April, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. E/1073/07 and E/194/09 Mum
(Arising out of Orders-in-Appeal No. PI/27/07 dated 06.03.2007 and PI/VSK/247/08 dated 20.11.2008 passed by the Commissioner of Central Excise (Appeals), Pune I.
For approval and signature:
Shri. M.V. Ravindran, Member (Judicial)
1. Whether Press Reporters may be allowed to see : No
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 : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
Tata Motors Ltd.
:
Appellant
Versus
CCE Pune I
Respondent
Appearance Shri Rajesh Ostwal, Advocate for Appellants Shri V.K. Shastri, Asst. Commissioner (A.R.) for Respondents CORAM:
Shri. M.V. Ravindran, Member (Judicial) Date of Hearing : 01.04.2015 Date of Decision : ..
ORDER NO.
Per : M.V. Ravindran These two appeals are directed against Orders-in-Appeal No. PI/27/07 dated 06.03.2007 and PI/VSK/247/08 dated 20.11.2008. As both the orders are interconnected and arising on the very same appellant, these appeals are disposed of by a common order.
3. In Appeal No.E/1703/07 the issue is regarding adjustment of excess payment of duty against the short payment of duty. The appellant herein had sought provisional assessment of the goods cleared from their factory premises for the period April 2002 to March 2003. It was noticed on finalization of provisional assessment, that the appellant is entitled for refund of an amount after adjusting the excess payment made by the appellant during the relevant period in question. The adjudicating authority held that such adjustment is to be done and ordered for refund of an amount which paid in excess. Aggrieved by such an order, Revenue preferred an appeal before the first appellate authority. The first appellate authority after following due process of law reversed the decision taken by the adjudicating authority and confirmed the demand of duty by setting aside the adjustment of excess duty paid against short payment.
4. In Appeal No. E/194/09 the appellant had filed refund claim consequent to the order passed by the adjudicating authority which was rejected on the ground that the refund claim is premature as an appeal was disposed of in favour of the Revenue by the first appellate authority and CESTAT has not finally disposed of the appeal. On an appeal filed by the appellant the first appellate authority has also held that the refund claim is premature.
5. Learned Counsel appearing for the appellant would submit that adjustment of excess duty towards short payment of duty during the particular period, more specifically in the case of provisional assessment is covered by the provisions of Rule 7 of Central Excise Rules, 2002 and has been contested before the Honble High Court of Karnataka in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. vs. CCE 2012 (276) ELT 332 (Kar.) which has been followed by the Division Bench of the Tribunal in the case of CCE v. BSL Ltd. 2014-TIOL-1410-CESTAT-Del. He would take me to the said ratio as has been laid down by the Honble High Court and followed by the Tribunal.
6. Learned D.R. on the other hand would rely upon the decision of the Larger Bench of this Tribunal in the case of Excel Rubber Ltd. v. CCE 2011 (268) ELT 419 (Tri.LB) wherein the Larger Bench held that any amount which has been paid excess has to go through the hurdle of unjust enrichment even if it is arising out of finalization of assessment. He would also submit that the decision of this Bench in the case of My Car Pune Pvt. Ltd. v. CCE 2015-TIOL-412-CESTAT-MUM is also on the same issue and the Bench has held that excess payment cannot be adjusted against short payment.
7. I have considered the submissions made by both sides and perused the records.
8. The only issue involved in this case is whether an adjustment is possible against the short payment of duty vis-`-vis excess payment made by the assessee during the relevant period when the assessments were provisional and subsequently finalized. It is undisputed that the appellant had sought provisional assessment during the material period; on finalization, there is an excess and short payment and the adjudicating authority has ordered for adjustment of the excess payment towards the short payment and also ordered for refund of the amount which is excess.
8.1. I find that the issue is no more res integra. The provisions of Rule 7 of Central Excise Rules, 2002 covers the situation like the one in hand before me. The very same provisions were considered by the Honble High Court of Karnataka in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. (supra). Though the Lordships were considering as to whether any interest is liable to be paid to the assessee therein for delayed payment, the substantial question of law which was considered by the Lordships and addressed very clearly indicates that there has to be harmonious reading of the provisions of Rule 7 of the Central Excise Rules, 2002.
8.2 After harmonious reading of the said provisions, Lordships have held as under:-
7.?A perusal of the aforesaid provision makes it clear that, where the assessee is unable to determine the value of excisable goods or determine the rate of duty applicable thereto, he may request the competent authority as provided in the said provision, to permit him to pay the duty on provisional basis at such rate or on such value as may be specified by him. If the authority is satisfied, he may pass an order permitting such payment and taking all necessary steps for payment of any short fall in the duty payable at the end of assessment. Thereafter, a final assessment order is to be passed. If after the final assessment, if it is found that there is a short fall in payment of duty, sub-rule (4) provides for payment of interest on such short payment of duty. Whereas sub-rule (5) provides for refund of excess duty paid.
8.?Therefore, it is clear that after a final assessment order is passed, if the duty paid in terms of provisional assessment is less than the duty payable after the final assessment, the assessee is liable to pay the interest on the short fall. In the entire scheme of Rule 7, there is no indication that when an assessee is permitted to pay duty in pursuance of a provisional assessment order, if he is dealing with more than one goods, they have to be treated separately. Even though the duty payable under the Act is to be calculated under each head of each case ultimately it is the total duty payable for all the goods which are the subject matter of the provisional assessment and final assessment which is to be taken into consideration. If after taking into consideration the duty payable in respect of all the goods and the duty paid in pursuance of the final assessment order, if still the assessee is due in any duty, then for the short fall in payment of duty, the assessee is liable to pay interest. 8.3 I notice that the Principal Bench of this Tribunal in the case of BSL Ltd. (supra) following the law as laid down by the Honble High Court of Karnataka on similar issue held as under:-
7. As regards the Revenues appeal against Order-in-Appeal dated 05.08.05 of the Commissioner (Appeals), while on this issue, the judgement of the Larger Bench of the Tribunal in the case of Excel Rubber Ltd. v. CCE Hyderabad (supra) is in favour of the department, Honble Karnataka High Court in the case of Toyoto Kirloskar Auto Parts Pvt. Ltd. vs. Commissioner of Central Excise, LTU, Bangalore (supra) has taken a contrary view on the same issue holding that while finalizing a provisional assessment, the excess payment of duty can be adjusted against the short payment. This judgement is with regard to the provisions of Rule 7 of the Central Excise Rules, 2002. In our view the judgement of Honble Karnataka High Court is binding on the Tribunal. In view of this, there is no illegality or impropriety in Commissioner (Appeals) order dated 05.08.2005. The Revenues appeal No.3238 of 2005 is accordingly, dismissed. The C.O. also stands disposed of. 8.4 As against the above referred judgements and ratio, Revenue placed reliance on the decision of Larger Bench of the Tribunal in the case of Excel Rubber Ltd. (supra) and My Car Pune Pvt. Ltd. (supra) will not carry the case of revenue any further. I find that in the case Excel Rubber Ltd., the Larger Bench, in para 50, has specifically recorded that excess amount can certainly be adjusted towards any other duty liability of such assessee under the Excisee Act, 1944 and Rules made thereunder, however, such adjustments are subject to the applicability of the principle of unjust enrichment. 8.5 In the case of My Car Pune Pvt. Ltd., though the issue dealt with regarding the excess and short payment and adjustment thereof, I find that the Tribunal remanded the matter back to the adjudicating authority to reconsider the issue after going through the records. Hence the ratio as has been laid down in the case of My Car Pune Pvt. Ltd., may not be applicable in the facts of the case in hand; while the law which has been laid down in the case of Excel Rubber Ltd., (Larger Bench decision), I find that the question of unjust enrichment has not been raised or addressed before the first appellate authority and the adjudicating authority while in this case it is clearly held that there is no unjust enrichment. Hence the law as laid down by the Larger Bench of this Tribunal which specifically lays down that excess payment can be adjusted against any dues of an assessee is the ratio which has been correctly followed by the adjudicating authority in the case in hand. Be that as it may, the reliance placed by the learned D.R. on the Larger Bench decision may not carry the revenues case any further as the decision of the Honble High Court of Karnataka will prevail over the decisions of the Tribunal which is a settled law.
8.6 Accordingly, following the ratio as laid down by the Honble High Court of Karnataka in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. (supra) which are applicable in the facts and circumstances of this case, I find that the impugned orders are liable to be set aside and I do so.
7. Impugned orders are set aside and the appeals are allowed with consequential relief, if any.
(Order Pronounced in Court on ) (M.V. Ravindran) Member (Judicial) nsk ??
??
??
??
2