Custom, Excise & Service Tax Tribunal
M/S. India Japan Lighting Ltd vs Cce, Chennai on 24 September, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/222/2002 & E/15/2003
(Arising out of Order in Original No. 26/2001 (M-I) 27.12.2001, passed by the Commissioner of Central Excise, Chennai).
For approval and signature
Honble Ms. JYOTI BALASUNDARAM, Vice President
Honble Dr. CHITTARANJAN SATAPATHY, Technical Member
_________________________________________________________
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 the Honble Member wishes to see the fair :
copy of the Order.
4. Whether order is to be circulated to the :
Departmental Authorities? _________________________________________________________
M/s. India Japan Lighting Ltd. : Appellants/Respondents
Vs. CCE, Chennai : Respondents/Appellants Appearance Shri K.S. Venkatagiri, Adv., for the appellants/respondents Shri V.V. Hariharan, JCDR for the respondents/appellants CORAM Ms. JYOTI BALASUNDARAM, Vice President Dr. CHITTARANJAN SATAPATHY, Technical Member Date of hearing : 24.09.09 Date of decision : 24.09.09 Final ORDER No._____________ Per: Dr. Chittaranjan Satapathy, Both sides are in appeal against the same impugned order. Shri K.S. Venkatagiri, Ld. Advocate appearing for the appellant assessee, states that he is not pressing the appeal against the demand of duty and further states that the demanded amount has already been paid. He however, pleads that the penalty of Rs. 50,000/- imposed by the lower appellate authority should be set aside as the appellants did not know at the time of removal of the goods that they would be receiving additional amounts.
2. The department is in appeal against the impugned order as the lower appellate authority has demanded the interest and penalty under Section 11AB and 11AC. After hearing the matter for some time, we find that the issue involved in this case is akin to the issue decided by the Honble Supreme Court in the case of CCE Pune Vs. SKF India Ltd. 2009 (239) ELT 385 (S.C). The appellant assessee did not know at the time of clearance of the impugned goods that they would be receiving additional amount towards the value of goods. They have paid the differential duty after receiving additional amount and the Ld. Advocate is not pressing the appeal in relation to the demand of differential duty. We note that in the case of SKF India Ltd. (cited supra), Honble Supreme Court has held that payment of differential duty at a later date is clearly a case of short payment of duty though completely unintended and without element of deceit. The Honble Supreme Court has also held that interest is chargeable under Section 11AB but no penalty is attracted under Section 11AC in the absence of fraud, suppression etc. Applying the ratio of the said decision, we are of the view that the adjudicating Commissioner has correctly held that no penalty on account of fraud, suppression etc., is leviable in this case. As regards the payment of interest, he has also correctly held the same is not chargeable as at the material time the provision of charging interest on delayed payment was linked to cases of fraud, suppression etc.
3. As regards the token penalty of Rs. 50,000/- imposed for contravening Rule 173F, we find that under the said Rule, the appellant assessee was required to determine the correct duty amount and pay the same before clearance. In the light of the cited order of the Honble Supreme Court, there was an obligation, on the appellant assessee to pay the entire amount of duty at the time of removal itself. Therefore, by paying the duty short, the appellants have contravened Rule 173F and consequently they are liable to penalty under Rule 173Q for removal of goods in contravention of Rules. We also note that the adjudicating Commissioner has correctly noted that under Rule 173Q (1) (a), intention to evade payment of duty is not an essential ingredient to invite penalty. Hence, we are of the view that in regard to the penalty of Rs. 50,000/- imposed by the adjudicating Commissioner, no intervention is called for.
4. In view of the foregoing, we uphold the impugned order and dismiss the appeal filed by the appellant assessee as well as the appeal filed by the department.
(Operative part of the Order pronounced in the open Court on 24.09.09)
(Dr. CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM)
TECHNICAL MEMBER VICE PRESIDENT
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