Karnataka High Court
The Commissioner Of Central Excise vs M/S Stella Rubber Works (Unit Ii) on 28 February, 2011
Bench: N.Kumar, Ravi Malimath
IN we HIGH coum" 0? KARNATAKA AT BANGALORE
DATED THIS THE 28?" DAY {BF FEBRUARY 2311
PRESENT
THE HONELE MR. JUSTICE N.KuM;réz§ %
AND
THE Hoswme MR.3usT:cé'«RA*JT:A'%MAL::§}iAT+a. " T
cEA.No.15é£'=oF 2007?"
BETWEEN:
The Commis§icsh e§*_af iC':erj»f.:fiai '
BangatoreV~i.{.£'::-{Emn5;$s.i§':éer%§t'é, V
QueeVn"S"'RcT~a§:iy, ' '
Bangé3__ic3r__e2:.-V56C'~._Q'€}1.V.__ ' " WAPPELLANT
(By sr:'v..M.%vem;até3 :2,édd¥gjAdvocate)
.-r41f/sv.TsV::e;iia;'Pzfiuber Works (Unit 1:)
" ,_N-é).VS0?,f'2V,_ BV;§'s1galore --Mysere Highway
..(B_y Ski" Gsampath, Advocate)
Ket*:gerji, '5i__ v
Bainga--_§'0re<*> S60 S60. "RESPONDENT
1* X 2? //....
This CEA flied under Section 356 01' the $'§Z'e.ritral Excise Act, 1944 arising out 91' Order dated 3{}.;S~.~a2Q_U7 paseed irr Finai Order M0606 8: 607K260? .p_r'ey"i-ht_1gVr. to decide the sebstantéai question 0:' few stated.ithe:'e'i;e..,__"set'_ aside the Fine! Order N0.606 & 607/2807 dated passed by the CESTAT Vide Anneg<;ure-E.*arse€--._:'re»stereA trj:_e'=» erder~én~appeal No.10?/2005 dated "2'7.«_:t'Q.2.;f)OhS'«8po*rdera irraepeai No.108/2095 dated 27».,1Q.-2{)i'J5'=.pass'ed' the Commissicrner of Centre! Excise{Arj';3eais~I'£_},"»BanVg_ai:}re._VV vide Armexures--C St A:*mex.1__i_re--D;._ in tE.1e".v;faVets_V§ and' ; circumstances of the case.
This CEA c<)rr:ir§g eh="t.:i'or"'>_orde:*S'~ this day, NKUMAR 3', deEivered'~3:h".--:-_fc-.i¥03_v%ng--.:_:»,,i tiiiettttrejékejritifeiehieiienging the order ;3aSSEEd"3Z')"y€ with the order passeti authority as weli as the first apeeiiate». that the rebate ciaimed cannot be_e<:iju.stedV cieims of the Department.
"24.:""'_..i;-_i/'£51;Siteiia Rubber Works (Unit II) the asses-ssee is iri"---E:i'ze._"beeihess of manufacture ef tread rubber; Gr:
i.gVra_theri*r§g irzteiiégence that M/s.Ste£Ia Rubber Works are ""._V5s'ug::i'3ree$ing the veiue ef their eieeraeees by fraueuéerrt £7 53 E E /1,.
yew,' means with an intentien to evade Centre! Excise duty, the Centrai Excise Gfficers visétee the business erehd.§.sVe5:ta._F1:fi setzee the connected documents/receres. they were issued with show causerwtice for"'th.ej'_:§e'n{1ar}e = differential duty payabie by them Keri' the.'-eerfedf.__fre::*ti 1982-83 1984-85 was assu_ee:2_%. Amer ktheVj"%e«;:§;Ag;;~g: mar adjudiceting authority "tzeid ca)f"§?tVAs_.:}%,4EVV$f;6}.6.98/w was the duty pegrehiei a eenaity ef Rs;.3,00,DGO,/-, Qrj appee§:..the"Veet.e was confirmed and the :te"V.'Ei:S;"};S,O0O/~. Thus an emour1t__Qt from the essessee to the of the assessee to pay the aforese§d..Lemeu'r=.t was not acceded to by the Depar'tment. aseessee paid twe Enstaimeets on their «egtn f1«e;:;2--20e3 a peneity or ?5,00o/-, and on '.e3ri;1A2:e:'ee:::;'eV-euty ef Rst7,46?616.98/at Whiie rejecting were efiimated that the deiay in payment ef arrears wouid their r_eé:;ee"st fer payment at arrears of ingtaiments they 3;
Va ../' /', result in their Iiabiiity to pay interest under Section ELAA cf the Act. They did not eay the interest'
3. The assessee has oae_hjid_re Uei't"ir4e1ferre:dv'tAd = LJnit~IE, The assessee ciaimedzya arriouhting to Rs.2;07,937/~'V_a«n_Vd aV"s:_Jr'ra of The rebate was sarzetionedt_3':-ifi_dwvever; afanetiened amount ef rebate waste;:;p;i_Qp;ria.te~d\~».ii't§,.t«;ards the interest amount whichimzvas as per the orders referred ibyhthe said Judgment, the the Commissiener of Appeais >t'h.a't.....er.der and dismissed the appeai.
Aggriexiedibyvtfiiei assessee preferred an appeai tdétgfhe Tribti:1'a.it_V_V"ifhe' Tribuhai heid that the rebate cannot 'bead§d:steCi«...towards the interest diie ef the assessee and aside the said order ef adjustment.
A§'<grie.;Qed~ the same; the revenue is Er; appeal. 4: The ieamed couiisei apeearirig for the revenue eeriteirided that by virtue of Section 1: ef tee Ceiitrai §~: /"4' / iv, Excise Act 1944,, the revenue was empowered to adjust the amounts due to the revenue by way of interestV_:'-otit,_of the amount due by the Department to the assef%;:se'er»'i3{'3i§: _ of rebate. Therefore, the Tribune»: >comrr1i'tteflo;e"=serioa.ie"= error in interfering with the saiciV'».oro:e'r therefore he submits that the'-.i_rr:oo'g~oeoi voreferA..yj:'veqVoEteeVétoflv be interfered with Section hot «-iixionoicfiideai with the recovery of sorrasr-...riu_e{toa:_'i:he'=-fiioveyrnment reads as under:-- A i V' V A provision makes it very cEear:'tt'hé:t"itrainy:7ti'uty"~V.o'i" oth_'er"'eums due to the Centre? Goverri.rne.nt' and recovery of certain amo_unts,i'i'f. a'ny_oers-on~~~owii1g money to the assessee, the reye~no.e may oroee~e:i against such person and recover the o'th:e'r.sums due to the Government. It is in the 'netore_ot"i:g_eroishee proceedings The said provision does; riot ooréterrapiate eojustmerit of monies oue to the assessee .to§oerés the amount date to the revenue. Therefore Vfreiierite oieceo on the eaio oroarision does not heio the E':
s!j_/=/ /' revenue. Apart from the said prevision, the Eearned counsei was not able ta) point out any other _4;3r:cs>g:'é<:.a'_on which enabées the revenue to adjust the ama{}n'ts~~'_';i---:.:_e them as against the amounts due by >them'"to' as.se--sVse.e."'w 'V In fact reiiance is placed an the 3edg:men_ts.' which gives an impressien ~'rnet_V adji3s.tn1ent=§Vs" A§}£3r£fF1iS.55§bi€:.. h. Such adjustment is net statateryBgtjrovésion. When once the adjudic.at}n_g'the"a.n't~hLeA:EEt~,{» has hele that the assessee is entétéeci tc3:A.;*ef:nh~'d which he had paid to of a specific:
previs;p;3V: adjusting the said amount it is tmpreper fer them {:0 make simh this view of the matter, there is na4;q"uestior2"'Q_f"'irav<ik§rag equitabie Considerations. As ejntherity they cannot ievy any duty on the ._a's.seAsSvee..,,aneY'without authority ef the iaw they aise cannot etfj-est--._"tE:e"' amounts which are ettimately due to the V' e.ass_sess'ee when the amounts are due by the assessee to ' '._Vt'he''«Seeertment; after making refnne 0? the amount whieh is due it is eper: to the revenue ta preceed against the assessee ':0 recever the amounts under the pro_v%.3_E"e.his._of the Act, Therefore, the Tribuhai crammitted . setting aside the said adjustmerhme »__We_--'d{3"'~riotiwseean;/"" infirmity in the said order passerj itzy..i§he'Tri.¥:2§Lr:iéEV:"wh*:i%:;_h cails for interference. Accor"?:i_ih--gly the epgaealvi'é'§;A~r.dErs.mis3sed. However, the dE$:rVris.3ei--ELo'if_»'tvhe"-éjprieai wiii not come in the way of the revenue"s'e»:*§ve'ri_h»g e'riii'<)'J:,:ni: due if any. {E '3 5'
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