Karnataka High Court
The Commissioner Of Central Excise vs Bharat Heavy Electricals Ltd on 9 April, 2010
Bench: K.L.Manjunath, B.V.Nagarathna
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 09TH DAY OF APRIL, "
THE HON'BLE MR. JUSTICE'
AND Kb A V
THE HON'BLE MRS.
No;E54--[2:oQz_.
BETWEEN: H A
THE COMMISSICEER OE 'EXGISE
BANGALOR__E11'I..CQMMIS;E$1QNERATEB A
QUEENS ROAD A _
BANGA;QRE:56o'*eQ1_ --» '
... APPELLANT
(By Sri: N
ELECTRICALS LTD
ELEr;fmo.N1cs.:pmsIoN
MYSORE ROAD
L BAN"GALORE'--v56O O26
RESPONDENT
. hay LAKSHMI KUMARAN, ADV.) CEA filed u/S.35G{2) of the Centrai Exercise Act, 1944 A' arising out of Order dated 09--10--2006 passed in Final Order No.1723/06, praying that this Hon'b1e Court may be pleased to: /{V 44722»:
i. to decide the question of law as stated therein ii. set aside the Final order No.1'723/ 2006 dated 09-10-2006 by the CESTAT vide Annexure--C and restore the Order--in-- Appeai No.29/2005 C.E. passed by the CESTA--II, Bangalore vfide Annexure--B, in the interest of justice <32: equity. This CEA coming on for HEARINQQ'tiiis;-----:
Nagarathna J., delivered the following JUDGMENT,l The revenue has preferred this appeal the order dated 9.10.2006.l:.."'passed*--yin.:.'_Fin§"Wt)rderll No.1723/2006 by cssfmr sssgaore, i:5'y'~ raising the following substantial ' i} the 'interest on delayed « ycoiriitairied in Section 11Ai-3 are A duty determined under Sub-
l2}v:of Section 11A or also for duty which been paid under Sub--section 11A of the V' - eéijiiii-at Excise Act, 1944?
ii),__" -.dl?Vhether an assessee is liable to pay interest when he pays the duty because of subsequent refixation of prices through supplementary invoices, from the date of clearance of the goods?
iii} Whether the Honfble CESTAT Bangalore has right in law, granting immunity from penalty to the respondent?
_ 3 _
2. The facts leading to the filing of this appeal are that, the respondent--assessee which is a manufacturer of.__heaVy electrical goods had cleared the goods on payment-«ofat l6 % as prescribed while discharging the respondent had been paying the dutyin theivaltipef arrived at on the date of payrnerit appellant, by contending that_v'th,ere was a delay'«:iIiv-paymen'ti.0' of duty on account of \(ariation..ihfp1'iee, ishsuedva show cause notice dated 19.10.200'4T'by deriiandingfiiilterest and penalty on the delayed p--ayment' of cluty from 1.4.2003 to 31.3.20.0.4§=.. replied to the said show causedlliiiificién,01";§.'VV8..ll1'.l'Z004 the said matter was adjudicated in original was passed on
27.p1_2v.200-44" Vconiiivrnifig the demand made in the show cai,ise:,.g.,;1otice. aggrieved by the said order. the Lliad preferred an appeal before the of Central Excise [Appeals ll} which authority also 'confirmed the order in original by his order dated A 0' The respondents thereafter preferred an appeal before the tribunal which was allowed on 9.10.2006. It is against the said order the revenue has preferred this appeal. fr»:
3. We have heard the learned counsel for the appellant and the learned counsel for the respondent--assessee;~.
4. The main contention of the MaVppellan't"islthat. vwhen " "
there was a Variation in the price, tC1.be p'aici the price variation (escalation) and -the samelllnad notjbeven clone, , * when the actual duty was on of the delayed payment, the _;.1istified issuing the show cause and alsoyypdernaiidpinpg penalty for the said for the period from 'therefore, submits that in terms pf Excise Act, 1944, the demandlytaa-de Was.» and that the tribunal was not correct_ in setting...'asidell'"the orders passed by the lower '--v_aut-.borities.'vl. He, therefore, submits that the order passed' by set aside and the demand made in terms of the _show_ notice be upheld.
, Per 'contra, learned counsel for the respondent brought l to_l'ou--1' notice the copy of the show cause notice as well as the reply issued to the same and has contended that Section V IIAB of the said Act is not applicable to the facts of the present case considering the fact that as on the date the duty was paid there was no price variation and therefore, the {>5 Having regard to the contents of the show cause notice and the reply, We are of the View that in the first instan.ce,there has been no demand made for payment of .
such a demand could not have been made "consider.ing the " = fact that the respondent--assesseeThad..paid"'t.h:e,.'dnty'=on difference in the price and therefore, t1n,e'differenbtial:'dut)!i' 2 paid for the relevant per1od."V'Vl'i'w.ITn' the Vcircpurristances, the provisions envisaged under :. are not applicable to the facts in the instant case there has the duty nor there has been under Section (213) of pislvlaliblicable and Interest on delayedvlpaymeiitylyof only when any duty of excise has I19' been le'vied;or'=pai'dV or has been short levied or short ./V_paid_"or;erroneouslyfeiiinded. The aforesaid circumstances "not-dappvliicable in the instant case. Therefore, the issuanceftovfltlie show cause notice dated 19.10.2004 by involiing provision of Section 11A)?» in the instant case is 0' '..ffimpi'oper and not in accordance with the said section. if Learned counsel for the appellant has however relied upon the decision of the Apex Court in the case of Commissioner of Central Excise, Pune V/s. SKF India Ltd. £4.
the said direction, the supplementary invoices were issued to facilitate the recovery of the expenditure of cost escalation and the enhanced duty thereon was paid. ' ~ the date the goods were cleared initially,:'if'"' escalation had not taken place, then the..assessee' couidpnot foresee, the subsequent escalation in price. Iioiniezrer, in the._' instant case the assessee paid on the differential price also. Therefore, we decision to the present case.
8. For the agfoitesaid» for the reasons assigned by the idew that the substantial questions of law 'in:fAthi.s appeal have to be answered against the reventte} Accordingly, the appeal is dismissed.