Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S. Shasun Chemicals & Drugs Ltd on 8 September, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
E/237/06/MAS
[Arising out of Order-in-Appeal No.08/2006(P) dated 24.1.2006 passed by the Commissioner of Central Excise (Appeals), Chennai ]
For approval and signature:
Honble Mr. P. Karthikeyan, Member (Technical)
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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 the Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
Commissioner of Central Excise, Pondicherry
Appellant
Versus
M/s. Shasun Chemicals & Drugs Ltd.
Respondents
Appearance:
Shri M.K.A.K.Mohiddin, JDR Smt. Nisha Bineesh, Adv. For the Appellant For the Respondents CORAM:
Mr. P. KARTHIKEYAN, MEMBER (T) Date of hearing : 8.9.2008 Date of decision : 8.9.2008 Final Order No.____________/2008 This is an appeal filed by the Revenue against the Order-in-Appeal No.8/2006 dt.24.1.06 passed by the Commissioner (Appeals), Chennai. M/s. Shasun Chemicals & Drugs Ltd had cleared a consignment of 18 M.Ts of Ibuprofen USP for export under ARE 1 No.248/2003-04 dated 30.12.2003. The consignment was cleared for export by the Customs as per the respondents reply to the Show Cause Notice furnished to the original authority. Later on, on the basis of rumours of theft, the consignment was called back by the respondent when it was found that the goods had been substituted by sand bags. The respondents complaint in the jurisdictional police station for pilferage/theft of the export consignment is pending. Following their failure to export the consignment, the respondent honoured the directions of the departmental authorities and paid the central excise duty due on the goods covered by the ARE 1No. 248/03-04. There was a time gap of 100 days between the date of removal of the consignment from the factory and date of payment of the excise duty on 8.4.2004. The original authority demanded interest of Rs.41,327/- on the delayed payment of duty. An amount of Rs.7,384/- was demanded towards the interest for the delayed reversal of excess MODVAT credit taken irregularly by the respondent. In the impugned order, the Commissioner (Appeals) vacated the demand for interest working out to a total of Rs.48,711/-. He found duty liability had arisen only on account of pilferage of consignment and its replacement with sand bags. He also found that the department had come to know all these developments only on receipt of the intimation from the respondent. He found the respondent was not liable to pay interest as, in a string of judicial authorities which he had relied on, the Tribunal, various High Courts and apex Court, had vacated the demand of interest where the parties had paid duty due before issuance of Show Cause Notice even in cases of clandestine removal.
2. Heard both sides.
3. In the instant case it transpires that, as per the official records, the goods cleared for export under bond from the respondents factory had been exported. Therefore, apparently, the respondents were not liable to pay the excise duty on the impugned goods. However, they paid duty on the goods. The Commissioner (Appeals) waived the demand of interest on the ground that various authorities supported such a view. However, Revenue has submitted that the decisions relied on by the Commissioner (Appeals) pertained to cases that pertained to the period prior to 11.5.2001 when sub-section 2(B) of Section 11A was introduced in the statute. The ld. Counsel for the respondents countered this submission on the basis that sub-section 2(B) of Section 11A applied only to cases of the assessee making good short payment of duty belatedly on its own ascertainment. I find that the respondent is not liable to pay interest in the instant case as the goods cleared under Bond for export had been exported and the principal itself was not due from them. The demand of interest is not sustainable.
4. As regards the amount of Rs.7,384/- being interest on belatedly reversed the MODVAT credit irregularly taken initially, the respondent has consistently maintained that this amount had not been utilized by them. The ld. Counsel had cited their averments to this effect recorded by the original authority at the time of hearing. The exchequer had not been deprived of its right to enjoy any amount by the respondents utilizing the MODVAT credit found to have been wrongly availed (and reversed belatedly). The respondent is not required to pay any interest by way of compensation to the Government. I also find that in Maruti Udyog Ltd Vs. CCE 2006 (196) ELT 323 (Tri.-Del.), it was held as under in respect of demand of interest in similar circumstance.
The appellants grievance is that they had only taken this credit as an entry in their Modvat records and have, in fact, not utilized the same till date, in which case no interest can be validly confirmed against them. The above submission made by the ld. Advocate has not been disputed by the ld. DR. As such, we are of the view that in the absence of utilization of credit, no interest can be confirmed against the appellant.
5. The Revenue appeal is dismissed.
(Dictated and pronounced in open court) (P.KARTHIKEYAN) MEMBER (T) swamy ??
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