Custom, Excise & Service Tax Tribunal
M/S. Malu Sleepers (Maharashtra) Pvt. ... vs Commissioner Of Central Excise & ... on 26 June, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/1328, 1329/11 [Arising out of Order-in-Appeal No. PIII/RS/115-116/2011 dtd. 27/5/2011 passed by the Commissioner (Appeals-III), Central Excise, Pune-1] For approval and signature: Honble Mr 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 :
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?
=======================================================
M/s. Malu Sleepers (Maharashtra) Pvt. Ltd.
:
Appellants
VS
Commissioner of Central Excise & Customs, Pune-II
:
Respondent
Appearance
Shri Suresh Singh, Cost Accountant for the Appellants
Shri V.K. Shastri, Asstt. Commissioner (A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 26/6/2015
Date of decision: 26/6/2015
ORDER NO.
Per : Ramesh Nair
These two appeals are directed against Order-in-Appeal No. PIII/RS/115-116/2011 dtd. 27/5/2011 passed by the Commissioner (Appeals-III), Central Excise, Pune-I, wherein Ld. Commissioner upholding the order-in-original to the extent to confirmation of interest under Section 11AB of Central Excise Act, 1944, set aside the order imposing penalty of Rs. 5000/- under Rule 27 of the Central Excise Rules, 2002.
2. The appellant filed these appeals challenging the demand of interest under Section 11AB in respect of duty paid subsequent to the clearance of the goods due to the variations in price as per escalation and de-escalation clause in the contract.
3. Shri Suresh Singh, Ld. Cost Accountant for the appellant submits that this is not the case of delay in payment of excise duty. In the present case supply made to the railway against the contract wherein the provisional price are fixed in the contract and alongwith the same, there is escalation and de-escalation clause for the reason that final price is decided only on the basis of RBI Price Index. Therefore final price could not be decided at the time of removal of goods. When the RBI publish price index periodically from time to time, therefore subsequent to the supply only, price can be known as and when RBI publish price index and therefore price of the goods cannot be finally fixed at the time of clearance of the goods, for this very reason escalation and de-escalation clause was provided in the contract. On publication of price index if there is variations in price on higher side then the appellant is required to issue supplementary invoices to the railways and at the time of issuance of supplementary invoices differential excise duty is paid. It is his submission that in view of the above undisputed position and nature of supply duty itself become payable as and when price index is published and supplementary invoices is issued. Therefore interest on differential duty for the period from the date of clearance till the issuance of supplementary invoices cannot be demanded for the simple reason that differential value does not exist during that period, it arises only at the time of issuance supplementary invoices. He submits that issue is squarely covered by the Honble Karnataka High Court judgment in the case of Commr. of C. Ex., Bangalore-III Vs. Bharat Heavy Electricals Ltd.[2010(257) ELT 369 (Kar)] which has been upheld by the Honble Supreme Court by dismissing the Revenues SLP No. CC-17917/2010 as reported in [2015 (318) E.L.T. A155 (S.C.)] therefore the issue under particular fact regarding the demand of interest on the supplementary invoices has been settled finally. He prays for setting aside the impugned order and allow the appeal.
4. On the other hand, Shri V.K. Shastri, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that on the issue of interest on the duty paid subsequent to the clearances of the goods, Honble Supreme Court in the case of Commissioner of Central Excise, Pune Vs. SKF India Ltd. [2009(293) ELT 385(SC)] held that interest is demanded for the delayed payment of duty. He also placed reliance on the following judgments.
(a) Endurance Technologies Pvt. Ltd. Vs. CCE [2014(313) ELT 780(Tri. Mum)]
(b) Gammon India Ltd. Vs. CCE [2013(298) ELT 171(Bom.)]
(c) Alstom T&D India Ltd. Vs. CESTAT [2015(315) ELT 182(Mad.)]
5. I have carefully considered the submissions made by both sides and perused the records.
6. I find that on the issue of demand of interest on delayed payment of duty by way of supplementary invoices. The various judgments have been passed by various Honble High Court and also by Honble Supreme Court. On careful reading of these judgments, I find that in case of Bharat Heavy Electricals Ltd. (supra), the facts are absolutely identical to the facts of the present case. As the supply made to the railways and the prices at the time of clearances is not decided due to the reason that the price index which is published periodically and not available on day to day basis. The finalization of price takes place only after publication of RBI price index as per escalation and de-escalation clause. The supplementary invoices are raised subsequent to the clearance of the goods only after RBI publication of the price index therefore payment of excise duty is not made at the time of clearance of goods. In all other cases which was relied upon by the Revenue facts are different. Therefore when there are diversion decisions on the issue then in my view the judgment which is based on the identical facts has to prevail. In this position, following the ratio of Honble Karnataka High Court in the case of Bharat Heavy Electricals Ltd. (supra) which has been upheld by the apex court, I am of the view that interest on difference arising due to the price escalation as per the RBI price index the interest on duty is not chargeable, therefore impugned order is set aside and appeals of the appellants are allowed, with consequential relief, if any, in accordance with law.
(Dictated in court) Ramesh Nair Member (Judicial) sk 5 APPEAL NO. E/1328, 1329/11