Custom, Excise & Service Tax Tribunal
Nav Maharashtra Chakan Oil Mills Ltd vs Commissioner Of Central Excise, ... on 25 July, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. C/349/05 [Arising out of Orders-in- Appeal No. PII/BKS/471/2004 dated 27/10/2004 passed by the Commissioner of Central Excise & Customs (Appeals), Pune-II ] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) Honble Mr. Raju, Member (Technical) =======================================================
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Nav Maharashtra Chakan Oil Mills Ltd
:
Appellant
VS
Commissioner of Central Excise, Pune-II
:
Respondent
Appearance
Shri. Anil Balani, Advocate for the Appellants
Shri. Kamal Puggal, Asstt. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Honble Mr. Raju, Member (Technical)
Date of hearing: 25/7/2016
Date of decision 25/7/2016
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Orders-in-Appeal No. PII/BKS/471/2004 dated 27/10/2004 passed by the Commissioner of Central Excise & Customs (Appeals), Pune-II whereby he rejected the appeal of the appellant.
2. The fact of the case is that appellant warehoused the imported goods in the private bonded warehouse during the period January, 2001 to May, 2001. At the time of warehousing the goods, interest free period was provided for 180 days. However, as per the notification No. 23/2001-Cus(NT) dated 22/5/2001, effective from 1/6/2001, the interest was chargeable after expiry of bond period of 30 days. The appellant had cleared warehoused the goods during the period June, 2001 to December, 2001 and interest was paid considering 180 days as interest free period. The Revenues contention is that since the goods remained bonded after issuance of Notification 23/2001-Cus(NT), the interest free period is available to the appellant is only 30 days and interest is chargeable over and above the 30 days of bonding of the goods.
3. Shri. Anil Balani, Ld. Counsel for the appellant submits that when the goods were warehoused under bond, the appellant was under obligation that interest is chargeable after 180 days. Therefore even if Notification No. 23/2001-Cus(NT) prescribed period of 30 days for interest free period since the goods were warehoused prior to the notification therefore the period of 180 days as interest free shall be applicable and the notification No. 23/2001-Cus (N.T.) will not have retrospective effect. In support of his submission, he placed reliance on the following decisions.
(a) Commissioner of Central Excise, Chennai Vs. Caterpillar India Ltd[2009(237) ELT 349(Tri. Chennai)]
(b) LML Ltd Vs. Commissioner of Customs, Kanpur[2006(201) ELT 110(Tri. Del)]
(c) Jindal Steel & Power Ltd Vs. Commissioner of Central Excise, Raipur[2004(172) ELT 239]
(d) Collector of Customs & Central Excise Vs. J.K. Synthetics Ltd[1991(56) ELT 236(Tri.)]
4. Shri. Kamal Puggal, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that very same issue has been considered by the Division Bench of this Tribunal in case of Poddar Pigments Ltd Vs. Commissioner of Customs, Jaipur[2005(191) ELT 759(Tri. Del)].
5. We have carefully considered the submissions made by both sides and perused the records.
6. We find that the goods were warehoused prior to issue of Notification No. 23/2001-Cus(NT) during that time the statue has mandated interest free bonding period of 180 days. Under that provision the appellant has executed the bond and warehoused the goods. Though the Notification No. 23/2001-Cus reduced period of 180 days to 30 days w.e.f. 1/6/2001 but goods which already warehoused prior to that date, will not be governed by amended notification, particularly for the reason that the period of 180 days provided under statue was not curtailed by this statue. In our view, reduced period of 30 days will apply only in respect of goods warehoused on or after 1/6/2001. This issue has been considered in detail in the judgments cited by the Ld. Counsel. Relevant paras of the said judgments are reproduced below:
Caterpillar India Ltd
3.?We find that it is now well settled that Notification dated 22-5-2001 reducing the interest-free period in respect of the warehoused goods from 180 days to 30 days will apply only in respect of goods warehoused post 1-6-2001, such decision scan be seen in the case of Jindal Steel & Power Ltd. v. Commissioner of Central Excise, Raipur [2004 (172) E.L.T. 239 (Tri.-Del.)], LML Ltd. v. Commissioner of Customs, Kanpur [2006 (201) E.L.T. 110 (Tri.-Del.)] and Jindal Vijayanagar Steel Ltd. v. Commissioner of Customs, Mangalore [2007 (207) E.L.T. 65 (Tri.-Bang.)]. [This decision has been upheld by the Honble Karnataka High Court as seen from 2008 (222) E.L.T. 35 (Kar.)]. Following the ratio of the above decisions, we hold that there is no warrant to interfere with the impugned order of the Commissioner (Appeals) and accordingly uphold the same and reject the appeal.
LML Ltd
5.?Considered the submissions made by both sides and perused the records. I find, that it is not in dispute, that the appellants goods (imported) were warehoused by them under yellow Bill of Entry before 12-5-99, while assessing the said Bill of Entry the assessing authority had clearly indicated on the Bills of entries about the interest free period available to the appellant. I observe that the said Bills of Entries clearly specify the date from which interest shall be payable. This assessment was done by the Customs authorities at Mumbai and the goods were warehoused at Bonded warehouse, Kanpur. The reduction of interest free period by the Customs authorities at Kanpur while debonding, to my mind, would amount reassessment of the Bill of Entries, which could not have be done without following the proper of process of Law. Be that as it may, a division Bench of the Tribunal in the case of Jindal Steel & Power Ltd. (Supra) had an occasion examine an identical issue of reduction of interest free period in the year 2001, wherein at paras 5 & 6 it was held :
The original and first appellate authorities have held that the interest-free warehousing period of 30 days was applicable to all goods which were in warehouse as on 1-6-2001 or were warehoused after that date. According to the appellants, in respect of the goods warehoused prior to 1-6-2001, the interest-free period of six months under the pre-amendment provision of Section 61(2)(ii) alone would apply. For illustration, if any goods were warehoused on 15th May, 2001, it would be entitled to remain warehoused without interest on duty till 14th November, 2001 and interest would be leviable in respect of such goods only from 15th November, 2001. This, in our understanding, is what is meant by the plea of prospective operation of the amended provision of Section 61(2)(ii) supra. We find much force in this argument of the counsel for the appellants inasmuch as it is well-supported by some of the decisions cited by him and Circular No. 62/99-Cus., dated 17-9-99 of the CBEC has virtually accepted the above prospective operation of law. The said Circular was issued in clarification of Notification No. 30/99-Cus. (N.T.), dated 12-5-99 which provided for a graded scale of interest in respect of goods warehoused under Section 61(1)(b) of the Customs Act, which remained in warehouse beyond 6 months from the date of warehousing. After consulting the Ministry of Law, the Board clarified that the interest as revised under Notification No. 30/99-Cus. (N.T.), dated 12-5-99 was applicable in revised of goods warehoused prior to the said date but only from the expiry of six months or 12-5-99 whichever is later. Significantly, in respect of goods warehoused prior to 12-5-99 the revised interest rate was not made applicable for a period of six months from the date of warehousing. This rule of prospective operation appears to be equally good in respect of Notification No. 23/2001-Cus. (N.T.).
In the case of J.K. Synthetics (supra), the question arose whether, in respect of goods imported and warehoused prior to 13-5-1983 (the date on which Section 61 was amended to provide for payment of interest), any interest was payable at all. After examining Section 61(2) as amended as on 13-5-1983, this Tribunal found that there was nothing in the amendment to indicate that it was to operate with retrospective effect. It was accordingly held that the provision would have to be interpreted in the light of the generally accepted principle of statutory construction that every statute was prima facie prospective unless it was expressly or by necessary implication given retrospective operation. The Tribunal further noted that it is also well accepted that every statute which takes away or impairs vested rights acquired under existing laws, or which creates a new obligation or imposes a new duty, must be presumed to be intended not to have retrospective effect. Fiscal legislation imposing, liability is governed by the normal presumption of prospectivity. In this view, in respect of the goods imported and warehoused prior to 13-5-83, the Tribunal applied Section 61 as it stood on the date of warehousing Accordingly, it was held that the importer had no liability to pay interest. Following the ration of J.K. Synthetics (supra), we hold that, insofar as interest liability in the instant case is concerned, Section 61(2)(ii) as it stood prior to 1-6-2001 should be made applicable to the goods warehoused prior to the said date. Accordingly, the interest-free warehousing period of six months in full will be available to the goods warehoused prior to 1-6-2001. We have no doubt in our mind that any different view on the point will militate against the Honble Supreme Court's ruling in P. Mahendrans case (supra) To my mind the ratio of the division Benches, decision in above paras clearly covers the issue in this case.
6.?In view of the above findings and the circumstances the interest imposed and demanded from appellant, for the warehoused goods before 12-5-99, by invoking amended provisions of Section 61 of Customs Act, is not a correct legal position. Further, it is fairly admitted by the appellants counsel, that they had not produced any evidence regarding the unjust enrichment before the lower authorities, but seeks liberty to do so, before the adjudicating authority.
7.?The impugned order, wherein it is held that, the reduced interest free period will be applicable, even to the goods warehoused prior to 12-5-99 is set aside. As the appellant is ready to produce the evidence of non-passing of the amount to the buyer, I remand the matter to the adjudicating authority to consider the evidence produced by the appellant and pass appropriate order in respect of the refund claim, after granting a opportunity of hearing to the appellant. Ordered accordingly.
J.K. Synthetics Ltd
7. [Order per : D.C. Mandal]. - I have carefully perused the order written by learned Judicial Member Ms. Jyoti Balasundaram and concurred by learned Technical Member Shri I.J. Rao, but I could not persuade myself to agree with their decision. The normal period of warehousing for these goods under Section 61 of the Customs Act was one year when the same were warehoused on importation. Section 61 was amended on 13-5-1983. As a result of amendment of that Section the bonding period for these goods were reduced from one year to three months and a provision was inserted providing for charging interest on the amount of duty for the extended period of warehousing. In the present case, original warehousing period of one year was extended on the request of the importer after 13-5-1983. They also undertook to pay interest, if payable. The Order-in-Original of the Assistant Collector shows that interest was charged when initial period of bonding of one year expired. In other words, interest has been charged for the extended period in excess of one year. This is clearly permissible under the amended Section 61(2) of the Customs Act, which has been extracted in para 5 of the order proposed by Member (Judicial). This interest is nothing but a payment for delayed payment of duty because of extension of normal period of warehousing. The Department has correctly and very justifiably charged interest on the amount of duty in respect of the period which is beyond the original warehousing period of one year. There is no illegality involved in the same, nor this amounts to retrospective effect of the amendment to Section 61(2) of the Customs Act. As is clear in the present case, the interest has been charged after the amended Section came into force and that too for the extended period over the period of one year. In the circumstances, I uphold the Order-in-Original of the Assistant Collector and set aside the impugned order-in-Appeal passed by the Collector of Customs (Appeals). Accordingly, the appeal of the Revenue is allowed by me.
[Per: IJ. Rao]. - In accordance with the orders passed by majority, we dismiss the appeal.
In view of the above judgments it has been consistently held that the Notification No. 23/2001-Cus(NT) will have prospective effect and not retrospective effect, accordingly the goods warehoused prior to 1/6/2001 shall be governed by old provision, where interest free period of 180 days is applicable. The ratio of the judgments are squarely applicable in the facts of the present case. As regard the judgment incase of Poddar Pigments Ltd(supra) cited by the Ld. A.R., we found that firstly the order is exparte order. Secondly decision has not considered the judgment of this Tribunal in case J.K. Synthetics (supra) and Jindal Steel & Power Ltd (supra). For this reason also the decision of Poddar Pigments Ltd(supra) is not a good law therefore same is distinguished. As per our above discussions, we are of the view that appellant are entitle for the interest free period of 180 days in respect of goods warehoused prior to 1/6/2001 cleared for home consumption thereafter. We therefore set aside the impugned order and allow the appeal of the appellant.
(Operative order pronounced in court ) Raju Member (Technical) Ramesh Nair Member (Judicial) sk 2 C/349/05