Gujarat High Court
Asiatic Colourr Chem. Industries Ltd vs Commissioner Central ... on 22 February, 2017
Bench: M.R. Shah, B.N. Karia
O/TAXAP/703/2016 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 703 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH sd/
and
HONOURABLE MR.JUSTICE B.N. KARIA sd/
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1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India or any
order made thereunder ?
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ASIATIC COLOURR CHEM. INDUSTRIES LTD....Appellant(s)
Versus
COMMISSIONER CENTRAL EXCISE....Opponent(s)
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Appearance:
ANANDODAYA S MISHRA, ADVOCATE for the Appellant(s) No. 1
JAIMIN A GANDHI, ADVOCATE for the Opponent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 22/02/2017
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. Feeling aggrieved and dissatisfied with the impugned order passed by the learned Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as the "CESTAT") dated 08.04.2015 passed in Appeal No. E/10150/2015 being Order No. A/10308/2015, by which, the learned CESTAT has dismissed the said appeal preferred by Page 1 of 8 HC-NIC Page 1 of 8 Created On Sun Aug 13 06:53:03 IST 2017 O/TAXAP/703/2016 JUDGMENT the appellant, the appellant assessee has preferred the present appeal with the following proposed question of law:
"A.Whether the learned CESTAT is correct in upholding the observations of the learned Commissioner (Appeals) which has resulted further ambiguity and a demand of interest by the department as well ?
B.Whether the Revenue is correct in raising demand of interest under Section 11 AB on an amount already deposited with them by the appellant but under a different accounting head ?
C.Whether the payment of duty under wrong accounting head can be considered as short payment of duty under Section 11A resulting in the invocation of Section 11AB of Central Excise Act, 1944 ?
D.Whether the revenue is correct is considering the excess payment of duty by the appellant in Education & SHE Cess to the tune of Rs. 12,21,639/ and paid lesser to the same extent under the head of Basic Excise Duty (BED) to be a case of short payment so that Section 11AB of Central Excise Act can be invoked ?
E.Whether the Secondary and Higher Education Cess levied is a duty of excise and revenue has committed a mistake by not internally adjusting an amount already deposited by them and retained in the Union of India treasury towards Basic Excise Duty ?"
2.0. The facts leading to the present Tax Appeal in nutshell are as under:
2.1. That by Order In Original dated 13.01.2010 the adjudicating authority confirmed the demand of Basic Central Excise Duty i.e. Cenvat Duty amounting to Rs.12,21,639/under the provision of Section 11A of the Central Excise Act and also ordered for recovery of Page 2 of 8 HC-NIC Page 2 of 8 Created On Sun Aug 13 06:53:03 IST 2017 O/TAXAP/703/2016 JUDGMENT interest at appropriate rate under the provisions of Section 11AB of the Central Excise Act charged on the aforesaid amount of Basic Excise Duty of Rs. 12,21,639/. That the order passed by the adjudicating authority was carried in appeal before the Commissioner (Appeals) and by the order in appeal dated 11.07.2014 in the matter of Order In Original dated 13.01.2010, the Commissioner (Appeals) inter alia observed that adjudicating authority has held that the appellant had made short payment of Rs. 12,21,639/ in payment under Basic Excise duty and held that appellant should deposit the same under the accounting head of Basic excise duty. That on further appeal filed by the appellant before the learned CESTAT, the learned CESTAT vide order dated 08.04.2015 / 09.04.2015, as such, agreed with the finding of the Commissioner (Appeals) that to regularize the payment under their respective accounting head, the appellant should claim the refund of excess paid Education Cess and SHE cess and the the appellant should deposit the same under the accounting head of Basic Excise Duty. Therefore, learned CESTAT as such did not interfere with the order of the Commissioner (Appeals) and rejected the said appeal. It appears that thereafter pursuant to Order in Original confirming upto learned CESTAT, the assessee deposited Rs. 12,21,639/ vide challan no. 00390 dated 1.2.2016 but did not deposit the interest on the aforesaid government due of Rs. 12,21,639/ amounting to Rs. 14,59,733/ calculated from the due date till the date of actual payment of Basic Excise Duty. Therefore, vide notice dated 26.02.2016, the appellant assessee was called upon to pay up the interest on the aforesaid government dues of Rs.
12,21,639/ arising out of Order In Original dated 13.01.2010 confirmed by the learned CESTAT. At that stage, the assessee has preferred present appeal challenging the order passed by the learned CESTAT dated 08.04.2015 passed in Appeal No.E/10150 of 2015 being Order No. A/10308/2015 arising out of the Order in Appeal dated 13.07.2014, by Page 3 of 8 HC-NIC Page 3 of 8 Created On Sun Aug 13 06:53:03 IST 2017 O/TAXAP/703/2016 JUDGMENT which, the learned Tribunal has dismissed the said appeal confirming the order passed by the learned Commissioner (Appeals), by which, learned Commissioner (Appeals) as well as learned Tribunal did not accept the request on behalf of the appellant to adjust the amount of education cess and SHE cess which was paid by the assessee in excess, against the dues of the basic excise duty with the aforesaid proposed question of law.
3.0. Shri Mishra, learned advocate for the appellant has vehemently submitted that the learned Tribunal has materially erred in not regularizing the payment of Rs. 12,21,639/ paid in excess by the assessee and mistakenly paid under the accounting head of Education Cess and SHE Cess. It is submitted that therefore, while discharging total excess duty liability technically, it can be said that the assessee paid, there was short paid to the tune of Rs.12,21,639/ under the accounting head of Basic Excise Duty, the same is resulted in neutral activity with no loss to the Revenue in any manner and therefore, learned Tribunal ought to have regularized the payment of basic excise duty against the amount paid by the assessee of Rs.12,21,639/, which was mistakenly paid under the accounting head of Eduction Cess and SHE Cess. It is further submitted by Shri Mishra, learned advocate for the appellant that even otherwise the learned Tribunal ought to have considered that any amount paid under the wrong head and resulted any loss to the revenue can be adjusted internally.
3.1. It is further submitted by Shri Mishra, learned advocate for the appellant that order of the learned Tribunal has resulted in great hardship for the appellant assessee inasmuch as even after payment of Rs. 12,21,639/ to the Revenue for the second time in terms of the order of the learned Tribunal, the revenue started insisting on recovery of Page 4 of 8 HC-NIC Page 4 of 8 Created On Sun Aug 13 06:53:03 IST 2017 O/TAXAP/703/2016 JUDGMENT interest on the amount already deposited by the appellant.
3.2. It is further submitted that as such the amount of Rs.12,21,639/ has been deposited with the Revenue twice by the appellant and second amount of Rs. 12,21,639/ was deposited by the appellant after the order of the learned CESTAT.
3.3. It is further submitted by Shri Mishra, learned advocate for the appellant that in any case, Section 11AB of the Central Excise Act may be involved then there is a loss to the Revenue. It is submitted that in the present case Rs.12,21,639/ was already deposited by the appellant may be under the different head, however, subsequently it was found that the amount of Rs.12,21,639/ was paid in excess as there is no law to pay Education Cess and SHE Cess, Section 11AB of the Act shall not be applicable.
Making above submissions and relying upon decision of the Division Bench of this Court in the case of M/s. Falah Steel vs. Union of India rendered in Special Civil Application No. 7051 of 2015 - 2016 96) TMI 924 as well as in the case of Devang Paper Mills Pvt Ltd vs. Union of India reported in 2016(41) STR 418 (Guj) and relying upon CBEC Circular No. 7/93CX6 dated 23.4.1993, it is requested to allow / admit the present appeal.
4.0. Present appeal is vehemently opposed by Shri Jaymin Gandhi, learned advocate for the department. It is submitted that in the present case as such it is an admitted position that an amount of Rs. 12,21,639/towards basic excise duty was due and payable by the appellant and therefore, the learned Tribunal rightly confirmed the order of recovery of BED of Rs.12,21,639/ due and payable by the appellant. It is submitted that so far as amount of Rs.12,21,639/ paid by the Page 5 of 8 HC-NIC Page 5 of 8 Created On Sun Aug 13 06:53:03 IST 2017 O/TAXAP/703/2016 JUDGMENT appellant towards Education Cess and SHE Cess is concerned, as it was found that the said amount was not payable by the assessee, the learned Tribunal has rightly observed that for the aforesaid, it will be open for the assessee to file refund claim. It is submitted that as such admittedly appellant did file the refund claim of excess amount paid under the Education Cess and SHE Cess. It is submitted that not only that even assessee pursuant to the order passed by the adjudicating authority and OIO, which came to be confirmed by the learned Tribunal did subsequently paid / deposited an amount of Rs.12,21,639/ towards BED. It is submitted that as such the learned Tribunal taken care of hardship which may be suffered by the appellant assessee. It is submitted that as such no question of law much less substantial question of less arise in the present appeal. Therefore, it is requested to dismiss the present appeal.
5.0. Heard the learned advocates for the respective parties at length. At the outset, it is required to be noted that as per the OIO a sum of Rs.12,21,639/ was due and payable by the appellant towards BED. It is also not in dispute that adjudicating authority framed the demand of duty along with interest and penalty. Order In Original has been confirmed by the learned Commissioner (Appeals), however while partly allowing the appeal, learned Commissioner (Appeals) has observed that the appellant may file the refund claim of Rs. 12,21,639/ paid under the head of Eduction Cess and SHE Cess and they should also deposit the same under the accounting head of BED. The order of learned Commissioner (Appeals) has been confirmed by the learned Tribunal. It is required to be noted that the order passed by the Commissioner (Appeals) confirmed by the learned Tribunal has been acted upon by the appellantassessee. The appellant had already submitted the appropriate application for refund of amount of Rs.12,21,639/ paid under the Page 6 of 8 HC-NIC Page 6 of 8 Created On Sun Aug 13 06:53:03 IST 2017 O/TAXAP/703/2016 JUDGMENT Education Cess and SHE Cess. That the appellant had also deposited the amount of Rs.12,21,639/ under head of BED. Under the circumstances and in the facts and circumstances, it cannot be said that the learned Tribunal has committed any error in confirming the order passed by the learned Commissioner (Appeals), by which, the appellant was directed to deposit the amount due and payable under the BED and was also permitted to file refund application of Rs.12,21,639/ paid under the head of Education Cess and SHE Cess. It is the case on behalf of the appellant that while passing OIO the adjudicating authority had raised demand of Rs.12,21,639/ towards BED as well as interest on the same. It is the case on behalf of the appellant that Section 11 AB of the Act shall not be applicable and the appellant is not liable to pay interest on the amount of Rs.12,21,639/ as the amount of Rs. 12,21,639/was already earlier paid by the assessee may be under the different head. However, considering the provision of Section 11AB of the Act, it is required to be noted that interest is leviable on the amount of duty duty and payable. Admittedly, Rs. 12,21,639/ was due and payable by the appellant under the BED. At the same time, the appellant shall also be entitled to interest on the refund on the amount of Rs.12,21,639/ paid under the head of Education Cess and SHE Cess.
6.0. Now, so far as reliance placed upon the circular no.7/93 CX,6 dated 23.4.1993 of the CBEC is concerned, the same shall not be applicable to the facts of the case on hand. It is with respect to transfer of credit balance lying in personal ledger account under one minor head to another minor head.
7.0. Reliance placed upon the decision of the Division Bench of this Court in the case of M/s. Falah Steel (supra), relied upon by the learned advocate for the appellant is concerned, the same also shall not Page 7 of 8 HC-NIC Page 7 of 8 Created On Sun Aug 13 06:53:03 IST 2017 O/TAXAP/703/2016 JUDGMENT be applicable to the facts of the case on hand. Similarly, the decision in the case of Devang Paper Mills Pvt Ltd (supra) shall not be applicable to the facts of the case on hand.
8.0. In view of the above and for the reasons stated above, as such no error has been committed by the learned Tribunal while passing the impugned order. No substantial question of law arise. Under the circumstances, present appeal deserves to be dismissed and is accordingly dismissed.
sd/ (M.R. SHAH, J.) sd/ (B.N. KARIA, J.) Kaushik Page 8 of 8 HC-NIC Page 8 of 8 Created On Sun Aug 13 06:53:03 IST 2017