Customs, Excise and Gold Tribunal - Tamil Nadu
Balmer Lawrie & Co. Ltd. vs Commissioner Of Central Excise on 22 May, 2003
Equivalent citations: 2003(88)ECC556
JUDGMENT Jeet Ram Kait, Member (T)
1. This appeal is directed against Order-in-Original No. 30/2001 (Commissioner) dated 10.8.2001 by which the Commissioner has confirmed a sum of Rs. 6,17,643 being the duty payable at 8% on the value of exempted goods after adjusting voluntary payment made by the assessee in terms of erstwhile Rule 57CC, revalidated by Section 38A of Central Excise Act, 1944. He has also imposed a sum of Rs. 6,17,643 being penalty under Rule 173Q of erstwhile Central Excise Rules, 1944 read with Rule 25 Central Excise (No. 2) Rules, 2001.
2. Aggrieved by this order the appellants have come in appeal before us on the ground that the demand is time barred inasmuch as the show cause notice was issued on 3.11.2000 which was received by the appellants on the same date whereas demand under Rule 57CC pertains to the period 1998-99 and 1999-2000. They further submitted that for invoking extended period there is no allegation to the effect that the appellants had suppressed any material fact from the department. However the proviso to Sub-section (1) of Section 11A was also not invoked. The appellants further argued in their written submission that in the impugned order of the Commissioner also there is no finding to the effect that the appellant had suppressed any material fact from the department. Therefore the demand made in the impugned order prior to November 1999 is barred by limitation. In support of their contention, the appellant have relied on the following judgments rendered by the Tribunal;
(a) J.K. Chemicals v. CCE, 1991 (55) ELT 108 (T)
(b) J.K. Paints v. CCE, 1993 (68) ELT 96 (T)
(c) CCE., Bombay-II v. M.S. Silk Mills, 1995 (75) ELT 340 (T)
(d) Art Plywood Industries Ltd. v. CCE, 1995 (75) ELT 908 (T)
(e) Swamp Vegetable Products Industries v. CCE, 1995 (76) ELT 194 (T)
(f) CCE v. Kwality Ice Cream Products, 1998 (101) ELT 166 (T) They further submitted that they had paid the amount of Rs. 12,18,492 even prior to the issue of show cause notice as directed by the department. They also submitted that though the amount was paid as per the directions of the revenue, even if it is presumed to be voluntarily paid the bar of limitation under Section 11A of the Central Excise Act, 1944 would be applicable in such cases. In this regard they relied on the judgment rendered in the case of Hyderabad Iron & Steel Works Ltd. v. CCE, 1989 (44) ELT 588 (T) wherein it has been held that the bar of limitation under Section 11A of the CE Act is applicable even when time barred demand is honoured and such payment cannot be termed to be as voluntary being in pursuance of demand.
3. Ld. Advocate Shri S. Venkatachalam reiterated the submissions made in the memorandum of appeal as well as the written submission. He further submits that the demand is barred by time and bar of limitation under Section 11A of the CE Act can be applicable even when time barred demand is honoured and such payment cannot be termed as voluntary being in pursuance of the demand. He also invited our attention to the judgment rendered in the case of Rochees Watches Ltd. v. CC (Jaipur), 2003 (252) ELT 420 wherein it has been held that since there is no machinery provision which exists in Central Excise Act or Rules made thereunder for such recovery under Rule 57CC of the erstwhile CE Rules, 1944, they are not required to pay any amount to the department. He further submits that the Tribunal in the case of Rochees Watches Ltd. v. CC (supra) had relied on para 5 of the Tribunal judgment rendered in the case of SAIL, Bokaro Steel Plant v. Commissioner, 2002 (82) ECC 408 (T) : 2002 (242; ELT 574 (T) and also the judgment rendered in the case of Pushpaman Forgings v.
Commissioner, 2002 (149) ELT 490 (f). In view of the above submissions, Ld. Advocate submits that the impugned order may be set aside and appeal be allowed.
4. Appearing on behalf of the revenue, Shri C. Mani, DR submits that the Commissioner's order is correct in law inasmuch as per the provisions of Rule 57CC, an assessee manufacturing both exempted and final products and availing modvat credit on goods but not maintaining separate inventory for the manufacture both dutiable and exempted products will have to pay an amount equal to 8% of the value of the exempted final products. It is also submitted that the above-said amount has to be paid by way of adjustment in the RG 23A Part II or in PLA, if such adjustments are not possible, the amount has to be paid in cash. This adjustment or payment in cash is not a payment of excise duty and since the amount required to be paid is not excise duty the limitation of time shall not be applicable to the demand issued by the Deputy Commissioner of Central Excise on 3.11.2000. It is the duty of the appellant who are not in a position to maintain separate account both for exempted and dutiable final products to pay the amount equal to 8% of the vale of the exempted final product in terms of Rule 57CC of the CE Rules. He further submits that the unit had paid the amount only voluntarily and the amount paid by them is required to be paid even without any demand by the department by way of notice and without any limitation of time. The assessee could have paid the entire amount even prior to issue of notice and the Commissioner has imposed penalty only under erstwhile Rule 173Q of CE Rules, 1944 read with Rule 25 of CE (No. 2) Rules, 2001 and no penalty has been imposed on them in terms of provisions of Section 11AC of the CE Act. He therefore submitted that the order of the Commissioner is legal and proper and is required to be sustained.
5. We have carefully considered the rival submissions and find that the issue is no longer res integra and it has been decided by this Bench and other various coordinated Benches that there is no machinery provision which exists in Central Excise Act or Rules made thereunder for such recovery under Rule 57CC of the erstwhile CE Rules, 1944 as has been held in the case of Rochees Watches Ltd. v. CC (supra); SAIL, Bokaro Steel Plant v. Commissioner (supra) andPushpaman Forgings v. Commissioner (supra). Further we find that the show cause notice has been issued after expiry of six months and time limit prescribed under Section 11A is only six months and not an indefinite period. We therefore find that even on this ground also the demand is barred by limitation. In view of the above facts and circumstances and well settled legal position, we set aside the impugned order by allowing the appeal with consequential relief, if any, Ordered accordingly.