Custom, Excise & Service Tax Tribunal
M/S. Associated Capsules Ltd vs Commissioner Of Central Excise, Pune Ii on 16 April, 2014
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No. E/1890/06 & E/2160/06-Mum
(Arising out Order-in-Appeal No. PII/094/2006 dated 31.03.2006 passed by the Commissioner of Central Excise (Appeals), Pune II)
For approval and signature:
Honble Mr. Ashok Jindal, 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 Yes CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Yes
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
M/s. Associated Capsules Ltd.
Commissioner of Central Excise, Pune II
Appellant
Vs.
Commissioner of Central Excise, Pune II
M/s. Associated Capsules Ltd.
Respondent
Appearance:
Shri N.G. Dharmadhikari, Advocate for the appellant Shri V.C. Khole, JC (AR) for the respondent CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Date of hearing : 16/04/2014 Date of decision : 16/04/2014 O R D E R No:..
Both sides are in appeal against the impugned order.
2. The brief facts of the case are that M/s. Associated Capsules Ltd. (ACL for short) is in appeal against the order of adjusting the interest accrued on the amount of duty confirmed/accepted by M/s. ACL and the revenue is in appeal against the order of setting aside the adjustment of penalty on the duty amount paid/ accepted by M/s. ACL.
3. On 09.04.2002, a show-cause notice was issued to M/s. ACL alleging clandestine removal of excisable goods. During the course of investigation, M/s. ACL paid a sum of `3,40,625/- on account of clearance of PVC during the period 06.06.1997 to 19.10.2000. Later on, adjudication took place and a demand of `81,68,047/- were confirmed along with interest and equivalent amount of penalty on M/s. ACL. The said order was challenged by M/s. ACL before this Tribunal and this Tribunal confirmed the demand of `3,40,625/- but for consideration of remaining demands and penalties the matter was remanded for denovo adjudication. In remand proceedings, the proceedings proposed in the show-cause notice were dropped. That order has attained finality as no one challenged the order. Consequent to the said order, the amount paid by M/s. ACL at the time of consideration of appeal by this Tribunal of `35 lakhs as pre-deposit was sought to be refunded by M/s. ACL. While sanctioning the refund claim, the Adjudicating Authority deducted an amount of interest payable on these of `3,40,625/- during the intervening period and penalty equal to the duty and rest of the amount was refunded to M/s. ACL. M/s. ACL challenged the said order of deduction of said amount of interest and penalty from the refund claim. The Commissioner (Appeals) confirmed the order towards the adjustment of interest but set aside the adjustment on account of penalty. Therefore, M/s. ACL is before me for confirmation of order of deducting interest and revenue is before me for setting aside the order towards the adjustment of penalty.
4. The ld. counsel for M/s. ACL submits that initially the show-cause notice was issued and adjudication took place. They admitted their liability of `3,40,625/- for the intervening period which they paid before issuance of show-cause notice at that time. Further, the said adjudication order confirming the demand of interest and penalty has been set aside by this Tribunal on 01.07.2005 for reconsideration of penalties. In remand proceedings, the proceedings proposed in the show-cause notice were dropped and the said order has attained finality. Therefore, demand of interest and penalty does not arise. He further submits that as per proviso to Section 11AB of the Central Excise Act, 1944 interest cannot be demanded for the demands accrued for the period prior to assent of Finance Bill, 2001. Therefore, the impugned order qua confirmation of deduction of interest is to be set aside. With regard to penalty, he submits that as in remand proceedings the penalty has been dropped by the Adjudicating Authority, the same has attained fnality, therefore, question of demanding penalty does not arise.
5. On the other hand, ld. AR submits that while remanding this matter by this Tribunal to the Adjudicating Authority this Tribunal has not set aside the order of confirmation of interest. Therefore, both lower authorities have rightly demanded the interest, and the same has been rightly adjusted. He further submits that in the light of the decision of the Apex Court in the cse of Rajasthan Spinning & Weaving Mills 2009 (238) ELT 3 (SC) mandatory penalty is leviable on the assessee. In this case, M/s. ACL had accepted their liability, therefore, they are liable to be penalised for mandatory penalty. Accordingly, the impugned order qua setting aside the order of adjustment of penalty be set aside.
6. Heard both sides. Considered the submissions.
7. In this case, the initial adjudication took place and a demand of `81,68,047/- were confirmed along with interest and penalty. The said order was challenged by M/s. ACL before this Tribunal and this Tribunal remanded the matter back for reconsideration of the issue of certain demands and penalties imposed on M/s. ACL. This Tribunal also confirmed the demand of `3,40,625/-, the same was accepted by M/s. ACL. This Tribunal did not set aside the order of confirmation of interest by the Adjudicating Authority in the earlier round of litigation. The said order has been accepted by both the sides, therefore the confirmation of interest has attained finality in Tribunals earlier order. In these circumstances, I hold that both the lower authorities have rightly adjusted the amount of interest accrued during the intervening period on the amount of `3,40,625/-. Therefore, the appeal filed by M/s. ACL deserves no merits, hence dismissed.
8. Further, I find that in this case order of imposition of penalty was set aside by the Tribunal with a direction to the ld. Commissioner for reconsideration of the amount of penalty. In remand proceedings, the ld. Commissioner dropped the proceedings in Toto. Therefore, the question of imposition of penalty does not arise. In these circumstances, the order of adjustment of penalty from the refund claim by M/s. ACL does not arise. The contention of the revenue that mandatory penalty is leviable on M/s. ACL is not sustainable as the Adjudicating Authority itself has dropped the penalty against M/s. ACL and the same has attained finality. In these circumstances, revenues appeal also deserves no merits, hence dismissed.
9. In the nutshell, impugned order is upheld. Appeals filed by both sides are dismissed.
(Dictated in Court) (Ashok Jindal) Member (Judicial) //SR 5