Custom, Excise & Service Tax Tribunal
Yes vs Represented By : Shri Mangesh ... on 6 August, 2012
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad COURT-II Application No.E/S/77/12 Appeal No.E/13/12 Arising out of OIA No.SA/152/VAPI/2011, dt.28.09.11 Passed by Commissioner of Central Excise, Customs & Service Tax (Appeals), Vapi For approval and signature : Hon'ble Mr. M.V. Ravindran, Member (Judicial) Hon'ble Mr. B.S.V. Murthy, 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 should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Appellant (s) : M/s. Dupen Laboratories Pvt. Ltd. Represented by : Shri Mangesh Chowdhary, (Authorised Rep.) Respondent (s) : CCE Vapi
Represented by : Ms. Mallika Mahajan, A.R. CORAM :
Hon'ble Mr. M.V. Ravindran, Member (Judicial) Hon'ble Mr. B.S.V. Murthy, Member (Technical) Date of Hearing/Decision:06.08.12 ORDER No. _____________ /WZB/AHD/2012 Per : Mr. M.V. Ravindran;
This stay petition is filed for the waiver of pre-deposit of the penalty involved in this case as the appellant has already discharged the central excise duty liability and interest thereof.
2. After hearing both sides for some time on the stay petition, we find that the appeal itself could be disposed of at this juncture. Hence, after allowing the stay petition filed by the assessee, we take up the appeal itself for disposal.
3. Heard both sides and perused the records.
4. The issue involved in this case is regarding the valuation of physician samples cleared by the appellant during the period April 2005 to September 2006. The appellant had valued the said physician samples based upon the provisions of Rule 8 of the Central Excise Rules read with Section 4 of the Central Excise Act, 1944, while Revenue is of the view that the appellant should have valued the said physician samples based upon the prorata value of the sales pack manufactured and cleared. It is also the Revenues case that post 2005, the P or P medicaments fell under the category of goods chargeable to duty under the provisions of Section 4(A) of the Central Excise Act, 1944. After coming to such a conclusion, show cause notice was issued to the appellant. Appellants case is that they have correctly discharged duty and the differential duty is not payable by them, but have deposited the same before the issuance of show cause notice while small amount of Rs.59,911/- was paid of by them after the issuance of show cause notice.
5. We find that the issue involved in this case is regarding the discharge of differential duty on the physician samples based upon the prorate value of the sale pack. This issue is now squarely covered against the assessee as per Larger Bench decision in the case of Cadila Laboratories Ltd. 2008 (232) ELT 245 (Tri. - LB). Accordingly, we hold that the appellant is liable to pay the differential duty that arose during the material period. Since the appellant has already paid the entire amount of the duty liability, we hold that such duty is correctly paid by him. We also hold that the appellant liable to pay interest on the amount of duty so paid by them. Since they have already paid the interest on the amounts which they have paid before the issuance of show cause notice but have not paid the interest on an amount of Rs.59,911/-, we direct the appellant to pay the interest on the said amount of Rs.59,911/- within 30 days of the receipt of this order and produce the evidence before the lower authorities.
6. We take up the issue regarding the imposition of penalty on the appellant under Section 11AC of the Central Excise Act, 1944. We find that the issue of valuation of the physician samples cleared from the factory premises based upon the provisions of Section 4 of the Central Excise Act, 1944 was followed by the industry. The dispute between the department and the trade had to be decided by Larger Bench, hence it can be held that the appellant had bonafide belief of discharging the duty liability based upon the valuation under the provisions of Section 4 of the Central Excise Act, 1944 on the physician samples cleared by them. There is no dispute to the fact that the appellant was discharging the duty liability on the physician samples under the provisions of Section 4 of the Central Excise Act, 1944. In the facts and circumstances of this case, we find that the issue being of interpretation, the penalty imposed under Section 11AC on the appellant seems to be unwarranted. We deem it fit to set aside the penalty imposed by the lower authorities on the appellant.
7. Accordingly, appeal to the extent of setting aside of the penalty under Section 11AC of the Central Excise Act, 1944 is set aside. The appeal is disposed of as indicated hereinabove.
(Dictated and pronounced in the Court)
(B.S.V. Murthy) (M.V. Ravindran)
Member (Technical) Member (Judicial)
.JK
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