Custom, Excise & Service Tax Tribunal
Kohler India Corporation Pvt. Limited vs C.C.E, Bharuch on 14 August, 2017
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, 2nd Floor, Bahumali Bhavan, Asarwa, Ahmedabad Central Excise Appeal No.10737 to 10739 of 2015-SM Arising out of the Order-in-Appeal No.CCESA-VAD (APP-II)/SSP037 to 039/2014-15 dated 31.12.2014 by the Commissioner (Appeals II), Central Excise & Customs, Vadodara. Kohler India Corporation Pvt. Limited .. Appellants Vs. C.C.E, Bharuch ..Respondent-Revenue
Appearance:
Present Shri Anand Nainawati, Advocate for the appellants Present Shri L. Patra, A.R. for the Respondent-Revenue Coram: Honble Dr. D.M. Misra, Member (Judicial) Date of hearing/decision: 14.8.2017 Final Order No. A/11802 to 11804/2017 Per Dr. D.M. Misra:
Heard both sides. The short issue involved in the present appeals is: whether the appellant is required to pay interest against reversal of inadmissible credit. The credit was availed on various inputs during February 2008 to October 2009. On being pointed out by the audit team, the entire credit availed was reversed on 18.6.2010. Subsequently, the show cause notice was issued for recovery of interest on the credit reversed by the appellant.
2. The ld. Advocate Shri Anand Nainawati for the appellant submits that demand notice was issued under Section 11A of CEA, 1944 beyond the period of limitation and hence cannot be enforced. In support, he refers to the decision of the Honble Delhi High Court in the case of Hindustan Insecticides Ltd. vs. C.C.E., LTU 2013 (297) ELT 332(Del.).
3. Ld. A.R. for the RespondentRevenue reiterates the finding of the ld. Commissioner (Appeals).
4. I find that the appellant had reversed the credit on 18.6.2010 and demand notices were issued on 13/19-7-2011 which is beyond the period of limitation as prescribed under Section 11A of CEA,1944 for recovery of interest on the credit without allegation of suppression, mis-declaration etc. The Honble Delhi High Court in Hindustan Insecticides Ltd.s case (supra) observed as under:
14.?A reading of the aforesaid paragraph would show that in the said case notice of payment for interest was issued after four years and it was held that it was beyond a reasonable period and the department could recover the amount from the Assessing Officer, who had not taken steps for four years and not from the respondent-assessee therein. The finding of the Supreme Court on interpreting the applicable Act was that no limitation period was prescribed, therefore, proceedings for recovery could be initiated within a reasonable time. The ratio in the said case is distinguishable for the reason that payment of interest is to be made under Section 11A and, therefore, the period of limitation prescribed therein would equally apply as has been held by the Delhi High Court in the case of Kwality Ice Cream Company (supra), Punjab and Haryana High Court in the case of M/s. VAE VKN Industries Private Limited (supra) and Gujarat High Court in Gujarat Narmada Fertilizers Company Limited (supra). These judgments have relied upon the decision of the Supreme Court approving the view of the Tribunal in TVS Whirlpool Limited (supra) wherein pari materia provisions of the Customs Act were considered. This being a distinguishing feature, we feel that the appellant is entitled to succeed in the present appeals. The question of law is accordingly answered in affirmative, i.e., in favour of the appellant and against the respondent-Revenue.
5. Following the said principle of law, I do not find merit in the impugned order and accordingly, the same is set aside and the appeals are allowed with consequential relief, if any, as per law.
(Dr. D.M. Misra) Member (Judicial) scd/ E/10737 - 10739/2015-SM 1