Custom, Excise & Service Tax Tribunal
M/S. Parle Product Pvt. Ltd vs Commissioner Of Central Excise, Mumbai on 9 September, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. E/935/11 (Arising out of Order-in-Appeal No. SB/21/MI/2011 dt. 26.4.2011 passed by the Commissioner of Customs & Central Excise ) For approval and signature: Honble Shri Ramesh Nair, 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 : No
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?
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M/s. Parle Product Pvt. Ltd.
:
Appellant
VS
Commissioner of Central Excise, Mumbai
:
Respondent
Appearance
Ms. Aparna H. Adocate, for Appellant
Shri N.N. Prabhudesai, Supdt. (A.R) for respondent
CORAM:
Honble Shri Ramesh Nair, Member (Judicial)
Date of hearing : 09/09/2016
Date of pronouncement: 30/12/2016
ORDER NO.
The fact of the case is that the appellant is discharging excise duty on the value in terms of Rule 8 of the Central Excise Valuation Rules, 2000. As per the said Rule the valuation is done on cost construction method. At the time of clearance of the goods the exact costing is not possible therefore the valuation is supposed to be done on the data of last years and actual price can be arrived at only after completion of the financial year when the actual overheads are available in that process some differential duty arose for every financial year which has been paid by the appellant, obviously in the subsequent financial year. Therefore there is a delay in payment of differential duty between the date of clearance of the goods and the payment of differential duty. The issue involved in the present case is whether the said differential duty paid by the appellant is chargeable to interest under Section 11AB of Central Excise Act, 1944.
2. Ms. Aparna H., Ld. Counsel for the appellant submits that the show cause notice for demanding interest is time barred as the same was issued after 1 year from the date of payment of duty and suppression of fact is not involved. As regard the issue of chargeability of interest on the differential duty, she submits that the interest is not payable in the light of the following judgments:
(i) Commissioner of Trade Tax, Lucknow Vs. Kanhai Ram Thekedar 2005 (185) E.L.T. 3 (S.C.)
(ii) Kwality Ice Cream Company Vs. Union of India 2012 (281) E.L.T. 507 (Del.)
(iii) Hindustan Insecticides Ltd. Vs. Commissioner of Central Excise, LTU 2013-TIOL-631-HC-DEL-CX
(iv) Collector of Customs, Madras Vs. T.V.S. Whirlpool Ltd.
1996 (86) E.L.T. 144 (Tribunal) Upheld by Commissioner Vs. T.V.S Whirpool Ltd.
2000 (119) E.L.T. A177 (S.C.)
(v) Government of India Vs. Citedal Fine Pharmaceuticals 1989 (42) E.L.T.
(vi) Jai Bharat Maruti Ltd. Vs. Commissioner of Central excise, Delhi-III 2014 (307) E.L.T. 282 ( P & H) She also submits that the issue of interest on the differential duty is pending with the Larger Bench of the Supreme Court in the case of Steel Authority of India Ltd. Vs. Commissioner of C. Ex. Raipur 2015 (326) E.L.T. 450 (S.C.).
3. On the other hand, Shri N.N. Prabhudesai, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that as regard the interest, limitation does not apply. Even without issuance of show cause notice and adjudication thereof, the assessee is liable to pay the interest, if there is a delay in payment of duty. Therefore interest is correctly payable by the appellant.
4. I have carefully considered the submissions made by both the sides, I find that there is an admitted delay in payment of excise duty. Though the delay is due to non availability of the correct cost data to arrive at the correct assessable value in terms of Rule 8 but only because of this reason for the admitted delay in payment of duty, interest cannot be avoided. Section 11AB of the Act is clearly applicable for delay in making payment of duty. As regard the submissions of the Ld. Counsel on the limitation, I find that as regard the payment of interest, limitation does not apply. In my considered view there is no need of any adjudication proceeding for recovery of interest, the statutory provisions of Section 11AB itself is a provisions for recovery of the interest. The interest is piggy back of the duty, once the duty is admitted, interest cannot be detached from the duty liability, therefore the limitation doesnt apply in case of charging the interest. As regard some relied upon judgments of the Hobble High Court giving immunity from payment of interest. I am of the view that this Tribunal being creature under the Customs and Central Excise Act is bound by the said Act and any immunity granted by the higher court is under the inherent power of the Honble High Court, which power is not vested in this Tribunal. Therefore this Tribunal cannot grant any relief as regard recovery of interest. Regarding the issue of charging interest on differential duty referred to the Larger Bench of the Honble Supreme Court in the case of Steel Authority of India Ltd. (supra), I am of the view that the fact in that case is totally different from the facts in the present case. The matter referred to the Larger Bench of the Supreme Court involves the sale of the goods and issuance of the supplementary invoice. In the present case valuation is under Rule 8 of Valuation Rules 2000, which is only applied in a case where the goods are not sold and the sale value is not available. Since no sale is involved question of issuance of supplementary invoice does not arise. Therefore the issue under reference to Larger Bench of Honble Supreme Court is different from the issue in the present case. As per my above discussion, I am of the considered view that the interest is correctly payable by the appellant on the delayed payment of duty. The impugned order is upheld the appeal is dismissed.
(Pronounced in court on 30/12/2016)
(Ramesh Nair)
Member (Judicial)
SM.
5
Appeal No. E/935/11