Custom, Excise & Service Tax Tribunal
Klassic Wheels Pvt Ltd vs Commissioner Of Central Excise, ... on 5 June, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. 1. Application No. E/S/46/09 in Appeal No. E/209/09 2. Appeal No E/29/09 (Arising out of Order-in-Appeal No. JAK (252)142/08 dated 22.09.2008 passed by Commissioner of Central Excise & Customs (Appeals), Aurangabad.) For approval and signature: Honble Mr.P.G. Chacko 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 : Yes 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?
====================================================== Klassic Wheels Pvt Ltd Appellant Vs Commissioner of Central Excise, Aurangabad Respondent Appearance:
Shri S.B. Awate Consultant for Appellant Shri S.S. Katiyar, S.D.R, for Respondent CORAM:
Honble Mr.P.G. Chacko Member (Judicial) Date of Hearing: 5.06.2009 Date of Decision: 5.06.2009 O R D E R NO..
1. After examining the records and hearing both sides, I am of the view that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with pre-deposit, I proceed to deal with the appeal.
2. This appeal is by the assessee who had cleared their excisable product (components of motor vehicles) to certain manufacturers of motor vehicles during the period July 2006 to July 2007 on payment of duty on assessable value worked out on the basis of the price agreed between them and the buyers as reflected in the relevant original purchase orders. One of these purchase orders is available on record and the same contains a price variation clause which reads:
Price: The prices mentioned in the order are fixed and will not change unless specifically agreed by us in writing. This clause was invoked by the parties to the contract and eventually the buyers issued what is called purchase order amendment to the assessee, wherein enhanced price was stated for the assessee to be able to recover differential price from the buyers and pay differential duty to the exchequer. For this purpose, the assessee issued supplementary invoices to the buyers during the period February 2007 to January 2008. In other words, the assessee paid differential duty during this period on goods cleared during July 2006 to July 2007. These payments were reflected in their monthly ER-1 Returns also. Apparently, after seeing these returns, the department issued a show-cause notice to the assessee seeking to recover interest under Section 11AB of the Act on the total amount of differential duty for the period from the date of clearance of goods to the date of payment of differential duty. This show-cause notice also proposed a penalty on the assessee under Section 11AC of the Act. These proposals were contested. In adjudication of the dispute, the original authority passed an order (a) confirming against the assessee demand of differential duty of Rs 4,42,777/- (including education cess) under Section 11A of the Act and appropriating the payments made by them towards this demand, (b) ordering recovery of interest of Rs 53,080/- under Section 11AB of the Act, and (c) imposing a penalty of Rs 4,42,777/- on the assessee under Section 11AC of the Act. This decision was sustained by the Commissioner (Appeals) in appeal filed by the assessee. The present appeal of the assessee is directed against the Appellate Commissioners order.
3. There is no challenge in this appeal against the demand of differential duty. The challenge is against the demand of interest on the differential duty as also against the imposition of penalty. The learned Consultant for the assessee submits that the interest-related issue already stands settled against the Revenue by the two High Courts decisions viz Commissioner vs Chloritech Industries 2009 (235) ELT 17 (Guj) and Commissioner of Central Excise vs Polyplastics 2009 (236) ELT 210 (P&H). Both the High Courts have held that any interest was not payable under Section 11AB of the Central Excise Act on differential duty paid on excisable goods under supplementary invoices raised on buyers pursuant to price escalation. Identical issue had arisen before the Larger Bench of this Tribunal and the same was referred to the Honble President for constituting a five Member Bench for settling the issue vide Lucas TVS Ltd vs CCE, Chennai 2008 (89) RLT 327 (CESTAT-LB). The five Member Bench has since settled the issue in favour of the assessee in view of one of the High Courts judgment cited before me. In the result, the demand of interest on differential duty raised on the assessee has to be set aside and it is ordered accordingly.
4. It appears from the records that the assessee paid differential duty promptly upon receipt of differential price from their buyers. There was no delay whatsoever in this matter. Therefore, it can hardly be said that they indulged in suppression of facts with intent to evade payment of differential duty. The allegation to the contrary leveled against the assessee in the show-cause notice is baseless and therefore there is no question of the assessee being penalised under Section 11AC of the Act. In the result, the penalty is also vacated.
5. The impugned order is set aide as regards the demand of interest and penalty. This appeal is allowed.
(Dictated in Court.) (P.G. Chacko) Member (Judicial) rk 4