Custom, Excise & Service Tax Tribunal
M/S. Beco Chemicals Pvt. Ltd vs C.C.E., Raipur on 6 November, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066 Date of Hearing 06.11.2013 For Approval &Signature : Honble Mrs. Archana Wadhwa, Member (Judicial) Honble Mr. Sahab Singh, Member (Technical) 1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether Lordships wish to see the fair copy of the order? Seen 4. Whether order is to be circulated to the Department Authorities? Yes Appeal No.E/1691/2006-EX[DB] [Arising out of Order-in-Original No.COMMISSIONER/RPR/DE-NOVO/61, dated 12.01.2006 passed by the C.C.E., Raipur] M/s. BECO Chemicals Pvt. Ltd. Appellant Vs. C.C.E., Raipur Respondent
Appearance Ms. Reena Khair, Advocate - for the appellant Shri B.B. Sharma, DR - for the respondent CORAM: Honble Mrs. Archana Wadhwa, Member (Judicial) Honble Mr. Sahab Singh, Member (Technical) Final Order No.58215, dated 06.11.2013 Per Honble Mrs. Archana Wadhwa :
The impugned order stands passed by the Commissioner in terms of Tribunals Final Order No.330-331/03-B, dated 07.05.2003 vide which, after rejecting the appellants claim of exemption under Small Scale Industry Exemption Notification No.175/86, the matter was remanded to the original authority for re-computation of duty and for extending benefit of MODVAT credit. The Tribunal while remanding the matter also accepted the appellants claim that the provisions of Sections of 11AB and 11AC of the Central Excise Act, 1994, as regards interest and penalty, would not be applicable for the period prior to 28.06.1996.
2. The appellants grievance is that while re-computing the duty, the Commissioner has extended the benefit of deduction of commercial tax paid by the appellant wherever the same was mentioned in the invoices. However, there was some dispute going on with the tax authorities as regards payment of commercial tax and as such the same was not reflected in the invoices. The said tax was ultimately settled by the tax authorities against the appellant and the appellant deposited the same. Resultantly, they claimed deduction of the said tax from the assessable value of goods, but the Commissioner has rejected on the ground that the same was not paid at the time of clearance of goods.
3. We do not agree with the reasoning of the Commissioner. In terms of Section 4 of the Central Excise Act, 1944, all taxes paid are required to be deducted from the value of the goods so as to arrive at the correct assessable value. There is nothing in the said Section to limit the deduction of the taxes only to the amount paid at the time of clearance of goods which are reflected in the invoices. If a dispute about a particular tax is going on between the assessee and the tax authorities and ultimately settled against them and is actually paid by the assessee the said tax would also be eligible for deduction. Accordingly, we agree with the Ld. Counsel on this point.
4. Further, the Commissioner extended the benefit of MODVAT Credit to the appellant in terms of the directions of the Tribunal as contained in their remand order, for the period subsequent to the registration of the appellant. However, for the period prior to the registration, he has not extended the benefit even though the appellant has placed on record the documentary evidence reflecting on the payment of duty on various raw-materials/inputs.
Admittedly, prior to the registration, the appellant was working under Small Scale Industry Notification and was not required to register with the Department.
It is only when subsequent demands are raised against them on the ground of use of brand name, the appellants plea of MODVAT Credit was raised and accepted by the Tribunal. In such a scenario, the Commissioner was not justified to limit the said benefit only from the date of registration itself. We accordingly, direct the lower authorities to examine the appellant claim for the period prior to registration and if otherwise available, to grant the same.
5. Ld. Counsel also draws our attention to the Tribunal order observing that the provisions of Sections 11AB and 11AC of the Central Excise Act, 1944 would not be applicable for the period prior to 28.09.1996. However, the Commissioner in the present proceedings has confirmed the interest for the period prior to the said date in terms of Section 11AA of the Act and for the period post 28.09.1996, in terms of Section 11AB of the Act. We do not find anything contrary to the Tribunals directions in the said action of the adjudicating authority. Admittedly prior to 28.09.1996, the provisions of Section 11AA of the Act were available for confirmation of interest, which the adjudicating authority has rightly adopted. As such, we find no justification in the said plea of the assessee and the same is confirmed.
6. As regards penalty, it is seen that the Tribunal remanded the matter for consideration of Rule 173Q for imposition of penalty. Ld. Counsel fairly agrees with that Section 173Q of the Act is applicable but submits that the quantum of Rs.1 lakh be reduced further as the dispute was bona fide on availing the benefit under Notification. However, we find when the matter was taken up by the Tribunal, the appellant plea of bona fide was not accepted and the extended period was held invokable. If that be so, the appellants plea of bona fide cannot be accepted at this stage for the purpose of penalty. We accordingly do not interfere in the quantum of Rs.1 lakh imposed by the Commissioner.
7. In view of the foregoing, the appeal is partly allowed for re-computation in the light of our observations made in the preceding paras and partly rejected in terms of penalty and interest.
8. The appeal is disposed of in the above terms.
(Dictated and pronounced in the Open Court) (Archana Wadhwa) Member (Judicial) (Sahab Singh) Member (Technical) SSK -4-