Custom, Excise & Service Tax Tribunal
M/S. Tata Motors Ltd vs Commissioner Of Central Excise, Pune I on 21 February, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. APPEAL NO. E/1575,1576/07 (Arising out of Order-in-Appeal No. PI/BBP/128 & 129/07 dated 20.9.2007 passed by the Commissioner (Appeals) Central Excise, Pune-I For approval and signature: Hon'ble Shri M. V. Ravindran, Member (Judicial) ============================================================
1. Whether Press Reporters may be allowed to see : 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 : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy : of the Order? 4. Whether Order is to be circulated to the Departmental : authorities? ============================================================= M/s. Tata Motors Ltd. : Appellant VS Commissioner of Central Excise, Pune I Respondent Appearance Shri Bharat Raichandani, Advocate for Appellant Shri U.H. Jadhav, Authorized Representative (JDR) CORAM: Shri M. V. Ravindran, Member (Judicial) Date of decision 21/02/08 ORDER NO.................................................... Per : Shri M. V. Ravindran, Member (Judicial)
These two appeals are directed against the Order-in-Appeal No. .PI/BBP/128 & 129/07 dated 20.9.2007 vide which, the Ld. Commissioner (Appeals) has set aside the orders-in-original to the extent that they are not imposed interest on the appellant subsequent to the finalization of provisional assessment. Since the issue involved in both the cases are identical these two appeals are being disposed off by a common order.
2. The relevant facts that arise for consideration are the appellant obtained permission from the department for provisional assessment in respect of clearances affected by them to their sister units. The said provisional assessments were finalized by the adjudicating authority by orders-in-original dt. 28.3.2007 and 30.3.2007. Before the order of finalization, the appellant had already paid differential duty and hence adjudicating authority only adjusted amount of the duty already paid against the duty finalized. The adjudicating authority however, did not order for the recovery of interest as provided under Rule 7(4) of the Central Excise Rules, 2002. Aggrieved by such order, department filed an appeal before the Ld. Commissioner (Appeals). Ld. Commissioner (Appeals) vide the impugned order held as under:-
"I have considered the relevant records. The whole issue is about interpretation of Rule 7(4) of the Central Excise Rules, 2002. The same is reproduced below:-
"(4) the assessee shall be lliable to pay interest on any amount payable to Central Government, consequent to order for final assessment under sub-rule(3), at the rate specified by the Central Government by notification issued under Section 11AA or Section 11AB of the Act from the first day of the month succeeding the month for which such amount is determined, till the date of payment thereof." (italics added) The interest therefore is to be calculated from the first day of the month succeeding the "month for which" such amount is determined till the date of payment thereof. The expression "month for which" is very important. It is better to understand it by an illustration.
Suppose the assessments for clearances affected in September, 2004 were provisional. After the end of the financial year 2004-05 the assessments were finalized say in June, 2005 and short payment of duty of say Rs. 10,000/- was determined. The expression "month for which", will mean the month for which provisional assessment was resorted to i.e. September,2004. Therefore interest will start accruing from 1.10.04 till the date of payment. If the payment was made after finalization of the assessment say on 17.7.05 then the interest will be calculated for the period 1.10.04 to 17.7.05. If the short payment was made before finalization of the assessment say on 15.1.05 then the interest will be calculated for the period 1.10.04 to 15.1.05. In other words the date of order of the finalization of provisional assessment is not relevant. This is so because the expression used in the aforesaid Rule 7(4) is "month for which" such amount is determined and not "month in which" such amount is determined. Had the expression been "month in which" such amount is determined then the date of the order of finalization would have been relevant.
The respondents have relied on three case laws:-
(a) J.K. Industries Ltd. reported in 2006-TIOL-1341-CESTAT-Bang.
(b) Ispat Industries Ltd. reported in 2007 (209) ELT 280 (Tri.Mumbai)
(c) MSEB Pole Factory reported in 2005 (187) ELT 209 (Tri.-Mumbai).
In my humble opinion in the J.K. Industries case and other cases as well the above distinction (i.e. month for which vis-`-vis month in which) was not brought to the notice of the Hon'ble Tribunal. On the other hand I find that in para 13 of the Tribunal's decision in the case of Hindustan Chemicals Works reported in 1984 (18) ELT 28 (Tribunal)] and in para 2 of Tribunal's decision in the case of Canara Lighting Inds. Ltd. reported in 2004 (174) ELT 465 (Tri. Bang) the expression "month for which" was used. In para 6 of the Tribunal's decision in the case of K.L. Concast (P) Ltd. reported in 2007(209) ELT 425 (Tri.Del.) and in para 9 of the Tribunal's decision in the case of Tractors and Farm Equipments Ltd. reported in 2007 (212) ELT 223 (Tri.Chennai) the expression "month in which" was used. The contexts in which these expressions were used may be little different but they in a way support the view in the preceding paragraph".
Against the above said order, the Learned Counsel would point out the issue of charging of the interest after the finalization of provisional assessment under Rule 7(4) of the Central Excise Rules, 2002 is now settled law by the following decisions of the Tribunal:-
(i) Ispat Industries Ltd. Vs. Commissioner of Central Excise, Nagpur [2007 (209) E.LT. 280 (Tri.Mumbai)]
(ii) MSEB Pole Factory Vs. Commissioner of C. Ex. (Appeals), Aurangabad [2005 (187) E.L.T. 209 (Tri.Mumbai)]
(iii) M/s. J. K. Industries Ltd. Vs. Commissioner of Central Excise, Mysore [2006-TIOL-1341-CESTAT-Bang]
3. The Ld. JDR on the other hand emphasised that Ld. Commissioner (Appeals) has correctly pointed out the distinction and the non-consideration of the provisions in the orders of the Tribunal. It is the submission that the provisions of Rule 7(4) of the Central Excise Rules, 2002 clearly indicate that the interest is chargeable "succeeding the month for which the such amount is determined". He would emphasis, that the words "month for which" would indicate that interest is to be chargeable from the date the duty is provisionally assessed. He submits that all the three judgments as cited by the Ld. Counsel has not considered this provision specifically. It is also submitted that the matter may be referred to the Larger Bench if the Bench came to the conclusion that this provisions were not considered.
4. On considering the submissions made by both sides, I find that the Ld. Commissioner (Appeals) not accepting the judgments of the Tribunal in the case of J.K. Industries Ltd. (Supra), Ispat Industries Ltd. (Supra), MSEB Pole Factory, (supra) on the ground that the definition between "month for which" to "Month in which" was not brought to the notice of the Tribunal. I find that this would be very improper on the part of the Ld. Commissioner to give such interpretation. The provisions of Rule 7(4) have been very specifically addressed by all the three judgments of the Tribunal. I find that the provisions of Rule 7(4) have been specifically addressed by the Division bench of the Tribunal in the case of M/s. J.K. Industries (supra). To my mind, since, the very same issue which is before me, have been addressed specifically by division bench and other co-ordinate bench, the question referring the matter the Larger Bench does not arise. Hence the submission made by the Ld. JDR to refer the matter the Larger Bench is rejected.
5. It is not in dispute that the appellants herein had discharged the differential duty payable by them before the finalization of the provisional assessment. If that be so, all the decisions of the Tribunal as cited by the Ld. Counsel for the appellant would clearly apply in this case.
6. Respectfully following the said decisions, I find that the impugned order directing the appellant to pay the interest on the finalization of the provisional assessment is incorrect and is liable to be set aside and I do so. The appeals are allowed with consequential relief, if any.
(M. V. Ravindran) Member (Judicial) Sm 5