Custom, Excise & Service Tax Tribunal
Transformers & Electricals Kerala Ltd vs Commissioner Of Central Excise, ... on 25 July, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 21246 / 2014 Appeal(s) Involved: E/244/2008-SM [Arising out of Order-in-Appeal No. 28/2008 dated 13/02/2008 passed by the Commissioner of Central Excise, Customs & Service Tax, Cochin] Transformers & Electricals Kerala Ltd. Angamally South Kerala Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax, Cochin C.R Building, I.S Press Road, Ernakulam, Cochin - 682 018 Kerala Respondent(s)
Appearance:
Mr. Harish R., Advocate For the Appellant Mr. Ganesh Haavanur, AR For the Respondent CORAM:
HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER Date of Hearing: 25/07/2014 Date of Decision: 25/07/2014 Order Per: B.S.V. MURTHY The brief facts of the case are that the appellants are engaged in the manufacture of transformers and allied products. They manufacture goods on contract basis and are assessed to duty on the prices fixed subject to price variation based on the standard formula prescribed by IEEMA. Supplementary invoices are raised for claiming revision of prices and the differential duty is also paid on the differential value of the goods received. During 01.12.2005 to 31.03.2006, M/s. TELK paid duty on the differential value of the goods, but did not pay interest on the differential duty paid by them. The amount of interest payable worked out to Rs. 81,399/- during the period.
2. Learned counsel submits that in similar circumstances and on identical facts, Honble High Court of Karnataka in the case of Commr. Vs. BHEL reported in [2010 (257) E.L.T. 369 (Kar.)] had held that appellant is not liable to pay interest. The relevant paragraph of the decision of the Honble High Court in para 7 is reproduced below:
Learned counsel for the appellant has however relied upon the decision of the Apex Court in the case of Commissioner of Central Excise, Pune V. SKF India Ltd., [2009 (239) E.L.T. 385 (S.C)] to contend that the said provision is applicable on the facts of the present case also. We have perused the said decision and we find that we are unable to accept the contention of the learned counsel for the appellant that the said case applies to the facts of the present case. It is to be noted that in the said decision, the facts were that the assessee had demanded from its customers, the balance of the higher price by virtue of the retrospective revision of the price and therefore, on the date the goods were cleared, the differential duty had to be paid and the same had not been done which was held to be a short payment of duty as the differential duty was paid only later when the assessee issued supplementary invoices to the customers demanding the balance amounts. Under the said circumstances, the Apex Court held that it was a case of short payment of duty though it was not intentional and without any allegation of deceit. The facts of the present case are that after the goods were initially cleared and the appropriate duty had been paid subsequently, the price escalation was due to the increase in input labour and other costs which was determined by the All India Industrial Price Indices and by the Reserve Bank of India communicated by All India Electrical Manufacturers Association. In terms of the said direction, the supplementary invoices were issued to facilitate the recovery of the expenditure of cost escalation and the enhanced duty thereon was paid. Therefore, as on the date the goods were cleared initially, if such a price escalation had not taken place, then the assessee could not foresee, the subsequent escalation in price. However, in the instant case the assessee paid duty on the differential price also. Therefore, we cannot apply the said decision to the present case. The SLP filed by the Revenue and the review application filed thereafter have been dismissed. Therefore he submits that in view of the fact that the revision of price in both the cases namely in the BHEL case and in the appellants case arose because of the sum received, the decision in the case of BHEL is required to be followed by the Tribunal.
3. Learned AR opposed this submission and relied upon the decision in the case of CCE Vs. International Auto Ltd. [2010 (250) E.L.T. 3 (S.C)], CCE, Bangalore-III Vs. Presscom Products [2011 (268) E.L.T. 344 (Kar.)] to submit that the decision of the BHEL need not be followed. As regards Presscom Products decision, the learned counsel submitted that the same was rendered before the SLP filed by the Revenue in BHEL decision was dismissed. As regards the decision of the Honble Supreme Court in the case of International Auto Ltd., I find that the facts are not similar and in view of the fact that in the case of BHEL and the appellants case facts are identical, it would be more appropriate to follow the decision in the case of BHEL. Accordingly the appeal is allowed with consequential relief, if any, to the appellants.
(Operative portion of the order has been pronounced in open court on 25.07.2014) (B.S.V. MURTHY) TECHNICAL MEMBER iss