Custom, Excise & Service Tax Tribunal
Jindal Praxair Oxygen Company Pvt. Ltd vs Commissioner Of Central Excise, ... on 18 July, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/859/2007-SM [Arising out of Order-in-Appeal No.191/2007-CE dated 29.8.2007 passed by the Commissioner of Central Excise (Appeals), Mangalore.] JINDAL PRAXAIR OXYGEN COMPANY PVT. LTD. TORANAGALLU, BELLARY DISTRICT, KARNATAKA. Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax BELGAUM NO. 71, CLUB ROAD, CENTRAL EXCISE BUILDING, BELGAUM 590 001. KARNATAKA Respondent(s)
Appearance:
Mr. Shivaraj, Advocate MURALI &CO #102, HAUDIN HOUDIN HOUSE #5, HAUDIN ROAD, BANGALORE - 560042 KARNATAKA For the Appellant Mr. R. Gurunathan, AC (AR) For the Respondent Date of Hearing: 18/07/2014 Date of Decision: 18/07/2014 CORAM:
HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Final Order No. 22437 / 2014 Per : S.K. MOHANTY Brief facts of the case leading to this appeal are that there was an agreement between the appellant and M/s. JSW Steel Ltd. for the pipeline supply of goods. The appellant had received surcharge from M/s. JSW Steel Ltd. on account of income tax paid by it, which is treated as additional consideration towards supply of goods, on which central excise duty liability is required to be discharged. In the case in hand, the appellant had paid the central excise duty applicable on such additional consideration, but did not pay the appropriate interest, which is relatable to late payment of the central excise duty. The Central Excise Department issued the Show Cause Notice, calling upon the appellant to discharge the interest liability, for late payment of such duty. The show cause proceedings initiated were dropped by the adjudicating authority on the ground that the appellant had paid the central excise duty before issue of Show Cause Notice. The said adjudication order was challenged by the Revenue, on the ground that though the surcharge amount was received by the appellant late from its customer, M/s. JSW Steel Ltd, the interest liability is fastened on the appellant, with reference to the date of clearances of goods on different dates during the course of the year. In other words, according to Revenue, once the payment received is treated as the price of goods cleared on different dates during the whole year, the duty becomes payable on the dates when such goods are removed, and hence the interest liability starts from the date of such clearances. Accordingly, Revenue has pleaded for setting aside the impugned order. The Ld. Commissioner (Appeals) accepted the stand of the department and the appeal of the Revenue was allowed by setting aside the order dated 07.06.2006 passed by the adjudicating authority. Being aggrieved with the said impugned order, the appellant has filed the present appeal before the Tribunal.
2. Heard the Ld. counsels of both the parties and pursued the records.
3. I find from the available record that income tax paid by the appellant has been reimbursed by M/s. JSW Steel Ltd. in the form of surcharge, which definitely has a bearing on the assessable value of the goods, on which appropriate central excise duty is required to be discharged. The appellant has also accepted the duty liability and discharged the same at the end of the year. With regard to payment of interest, the submission of the appellant is that as per the provisions of the agreement with M/s. JSW Steels Ltd., at the end of the year they raise invoices and upon getting the amount reimbursed by them, the central excise duty attributable to such additional consideration was discharged by them. According to the appellant since there is no delay in payment of duty, there is no question of any interest liability.
4. Ld. Departmental Representative appearing for the Revenue reiterated the findings recorded in the impugned order and further submitted that charging of interest is mandatory in the cases, where duty is paid beyond the time limit prescribed in statute and that since the appellant itself has admitted that they had paid the duty belatedly, the interest is required to be paid as per the mandates of the statutes.
5. Central excise duty is leviable on removal of excisable goods from the factory. As per the concept of transaction value, the amount charged over and above the sale price, should also form part of the transaction value, for the purpose of payment of central excise duty, which has been accepted by the appellant in the present case. The fact of receiving of surcharge from its customer, M/s. JSW Steel Ltd. was known to the appellant beforehand, even though the invoice was raised subsequently at the end of the year. Since the additional consideration received on account of surcharge is relatable to the goods removed from the factory on different dates, the appellant was under statutory obligation to discharge the duty liability during the relevant month, during which the goods have been removed from the factory. Since the duty liability has not been discharged within the stipulated period, the appellant is liable to pay interest on such delayed payment of duty, for the reason that interest is compensatory in character, and the recipient of the tax dues is eligible to be compensated in the form of interest, for late receipt of the duty amount.
6. With regard to payment of interest, the present case is squarely covered by the judgement of the Hon'ble Supreme Court in the case of CCE, Pune Vs. SKF India Ltd. [2009 (239) ELT 385 (SC)] cited by the ld. Departmental Representative. The relevant paragraph is reproduced herein below:-
14. We are unable to subscribe to the view taken by the High Court. It is to be noted that: the assessee was able to demand from its customers the balance of the higher prices by virtue of retrospective revision of the prices. It, therefore, follows that at the time of sale the goods carried a higher value and those were cleared on short payment of duty. The differential duty was paid only later when the assessee issued supplementary invoices to its customers demanding the balance amounts. Seen thus it was clearly a case of short payment of duty though indeed completely unintended and without any element of deceit etc. The payment of differential duty thus clearly came under sub-section (2B) of Section 11A and attracted levy of interest under Section 11AB of the Act.
7. In view of the settled position of the law, the issue regarding payment of interest is no more res integra and accordingly, I find that there is no infirmity in the impugned order, and thus the appeal filed by the appellant is dismissed.
(Operative portion of the Order was pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER ssk 2