Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Toyota Kirlosksr Auto Parts Pvt. Ltd on 25 July, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order Nos. 21190-21191 / 2014 Application(s) Involved: E/MISC/26063/2013 in E/291/2008-SM, E/782/2008-SM Appeal(s) Involved: E/291/2008-SM, E/782/2008-SM [Arising out of Order-in-Appeal No. 09/2008 dated 07/03/2008 passed by the Commissioner of Central Excise and Service Tax, Bangalore] [Arising out of Order-in-Original No. 70/2008 dated 25/07/2008 passed by the Commissioner of Central Excise and Service Tax, Bangalore] Commissioner of Central Excise, Customs and Service Tax Bangalore-LTU 100 Ft Ring Road, JSS Towers, Banashankari - III Stage, Bangalore - 560 085 Karnataka Appellant(s) Toyota Kirlosksr Auto Parts Pvt. Ltd. Plot No. 21, Bidadi Indl Area, Ramanagar Taluk, Bangalore Appellant(s) Versus Toyota Kirlosksr Auto Parts Pvt. Ltd. Plot No. 21, Bidadi Indl Area, Ramanagar Taluk, Bangalore Respondent(s)
Commissioner of Central Excise, Customs and Service Tax Bangalore-LTU 100 Ft Ring Road, JSS Towers, Banashankari - III Stage, Bangalore - 560 085 Karnataka Respondent(s) Appearance:
Mr. R. Gurunathan, AR For the Appellant Mr. N. Anand, Advocate # 152, Race Course Road, Bangalore - 560 001 Karnataka For the Respondent CORAM:
HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER Date of Hearing: 25/07/2014 Date of Decision: 25/07/2014 Order Per: B.S.V. MURTHY Appeal No. 291/2008 is filed by Revenue and the period covered is 2006-07. Appeal No. 782/2008 is filed by the assessee and the period covered is 2005-06. In both the appeals issue involved is common and therefore both the appeals are taken together and a common order is being passed.
2. Appellant opted for provisional assessment in respect of their manufactured goods since the customer to whom the goods were cleared namely Toyota Kirloskar Motor Pvt. Ltd. was related person and therefore transaction value under Section 4(1)(a) of Central Excise Act 1944 (Act) was not applicable. The provisional assessment was permitted. The provisional assessment was finalized after getting the necessary details from the assessee and in both the cases it was found that there was short payment of duty in respect of certain items cleared by the appellant and in respect of certain items there was excess payment of duty. As far as the year 2005-06 is concerned, there was a short payment of duty was of Rs. 1,30,65,161/- which was remitted by the appellant even before finalization of provisional assessment on 30.10.2006 itself. Assessment was finalized on 22.12.2006. The excess payment amounted to Rs. 47,51,060/- in respect of which no refund was claimed by the appellant. As regards the year 2006-07, the excess payment was Rs. 1,10,84,180/- and short payment of duty was Rs. 35,29,558/-.
3. The learned counsel submits that the Honble High Court of Karnataka in the case of the same appellant in their order reported in [2012 (276) E.L.T. 332 (Kar.)] have held that for the purpose of calculation of interest for short-fall in payment of duty on finalization of provisional assessment, when the assessee is manufacturing more than one item, each item is not to be treated separately and the total duty payable for all the goods has to be calculated. Therefore in respect of the year 2006-07, where excess payment of duty was more than the short-fall, no liability arises on the payment as a result of finalization of assessment. As regards the year 2005-06 he submits that the issue as to whether interest has to be paid and if so from what date interest has to be paid had come up for consideration before the Tribunal in the case of Ispat Industries Ltd. Vs. CCE, Nagpur [2007 (209) E.L.T. 280 (Tri.-Mum.)] and Tribunal took the view that if differential duty is paid prior to final assessment, no interest is liable to be paid. He submitted that this decision was upheld by the Honble High Court of Bombay as reported in [2010 (259) E.L.T. 662 (Bom.)]. He also submits that the matter was carried to the Supreme Court and the Honble Supreme Court passed the following order on the appeal.
Delay condoned.
The special leave petition is dismissed. However, the question of law is kept open. In view of the decision of the Honble High Court of Mumbai which is against the Revenue and SLP filed has been dismissed he submits that the decision of the Bombay High Court has to be followed in the appellants case also. He submits that in view of the decision of the High Court, the Larger Bench decision in the case of Cadbury India Ltd. Vs. CCE, Pune-I [2008 (232) E.L.T. 224 (Tri.-LB)] relied upon by the learned AR has no relevance.
4. We have considered the submissions. As regards the differential duty, in view of the decision of the Honble High Court of Karnataka, the duty has to be calculated after considering the duty payable on all the goods together and therefore excess payment if any will have to be adjusted towards short payment to calculate the differential duty payable.
5. Coming to the date from which interest is to be calculated, I consider that the submission of the learned counsel that Bombay High Court decision has to be followed is not correct. This is because Honble Supreme Court where the matter was challenged, while rejecting the SLP, kept the issue of law open. This means that clearly Honble Supreme Court did not consider the law to have attained finality and therefore the dismissal of SLP was only a decision in personam. The legal issue remains open and it cannot be said that decision of Honble High Court of Bombay has laid down the law. Under these circumstances, I consider that the decision of the Larger Bench of the Tribunal relied upon by the AR is required to be followed.
6. In view of the above observations, I hold that interest is liable to be paid by the appellant from 1st day of the next month on the differential duty payable for each month as finalized. Needless to say the interest has to be calculated only if there is a differential duty payable after setting off the excess payment towards short payment. Appeals are decided in above terms.
(Operative portion of the order has been pronounced in open court on 25.07.2014) (B.S.V. MURTHY) TECHNICAL MEMBER iss