Custom, Excise & Service Tax Tribunal
M/S Kec International Limited vs Cce, Jaipur I on 29 October, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III DATE OF HEARING/DECISION : 29/10/2014. Excise Appeal No. 57238 of 2013 (SM) [Arising out of the Order-in-Appeal No. 220 (RDN)CE/JPR-I/2012 dated 31/12/2012 passed by The Commissioner, Customs & Central Excise, Jaipur I.] For Approval and signature : Honble Shri Rakesh Kumar, Member (Technical) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would 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 of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s KEC International Limited Appellant Versus CCE, Jaipur I Respondent
Appearance Shri Alok Arora, Advocate for the appellant.
Mrs. Suchitra Sharma, Authorized Representative (Jt. CDR) for the Respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) Final Order No. 54240/2014 Dated : 29/10/2014 Per. Rakesh Kumar :-
The appellant are manufacturers of galvanized transmission tower parts. They filed export rebate claims of Rs. 35,24,413/- in respect of export made by them. The Jurisdictional Assistant Commissioner vide order-in-original dated 22/03/11 sanctioned the rebate claim of Rs. 34,06,315/-. However, the order sanctioning the rebate also mentions that the assessee had issued price variation bills from time to time, that while in respect of such price variation amounts they had paid the Central Excise duty of Rs. 77,35,932/-, they had not paid the interest under Section 11AB of Rs. 8,08,190/- for the period from April 2010 to June 2010 on the duty, as intimated by the Range Officer vide letter dated 06/07/11 and that the Range Officer has recommended the recovery of this amount from the rebate claim. On this basis the Assistant Commissioner while sanctioning the rebate claim of Rs. 34,06,315/- ordered the deduction of the interest amount of Rs. 8,08,190/- from the above amount and as such issued the rebate cheque of Rs. 25,98,125/- to the appellant. Against this order of the Assistant Commissioner, the appellant filed an appeal before the Commissioner (Appeals) and the Commissioner (Appeals) vide order-in-appeal dated 31/12/12 dismiss the same against which this appeal has been filed.
2. Heard both the sides.
3. Shri Alok Arora, Advocate, the learned Counsel for the appellant, pleaded that the appellant on account of retrospective price variation in respect of supplies of finished product made by them had paid Central Excise duty on the differential amount received on account of the price variation, that according to the Department in respect of payment of duty on the differential amount received on account of price variation, interest on duty as per the provision of Section 11AB had not been paid, that the appellant were never intimated about the interest liability and not even a single letter in this regard had been issued to them, and that in view of this, the adjustment of the interest amount from the rebate claim by invoking Section 11 of the Central Excise Act, 1944 is incorrect. He also cited the judgment of the Tribunal (final order No. 1603-1605/2012 dated 23/11/12 in the appellants own case) for a different period where against the rebate claim sanctioned to the appellant, the interest liability had been adjusted and the Tribunal had set aside the order and remanded the matter to the original Adjudicating Authority for verification of the fact regarding there being some confirmed dues against the appellant in absence of which the such adjustment cannot be made.
4. Mrs. Suchitra Sharma, the learned Jt. CDR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that in case of retrospective price variation, when some differential amount is received on which the appellant is liable to pay the duty and the appellant pays the duty on his own ascertainment under Section 11A (2B) of the Central Excise Act, as per the provisions of this section, the appellant in addition to duty, is also liable to pay interest on the duty, that interest liability on the duty which is self assessed or self ascertained is automatic and no show cause notice is required to be issued and there is no limitation period for its recovery, that interest under Section 11AB on the duty paid on the differential amount received on account of price variation is payable in terms of judgment of Apex court in the case of CCE, Pune vs. SKF India Ltd. reported in 2009 (239) E.L.T. 385 (S.C.), that when interest had not been paid by the appellant and no show cause notice in this regard was required to be issued, the adjustment of the interest, from the rebate payable to the appellant has been correctly made and as such there is no infirmity in the impugned order.
5. I have considered the submissions from both the sides and perused the records.
6. The Department while sanctioning rebate claim in respect of exports to the appellant has adjusted an amount of Rs. 8,08,190/- on the ground that this amount represents the interest under Section 11AB on the differential duty paid by the appellant under Section 11A (2B) on the differential amount received by them on account of retrospective price variation. Under Section 11 of the Central Excise Act, 1944, in respect of duty and any other sums of any kind payable to the Central Government under any provision of this Act or the Rules made thereunder, the officer empowered by the Board to levy such duty or require the payment of such sum, may deduct the amount so payable from any money owing to the person from whom such sums may be recoverable. Thus for invoking Section 11, there must be some amount which is recoverable from an assessee and if this amount is not being paid, the same can be adjusted from any amount payable to the assessee. But it goes without saying that if according to the Department, any amount is recoverable from the assessee, the assessee has to be intimated about the same. The department on its own without hearing the assessee or intimating the assessee cannot determine that certain amount is recoverable from him and adjust the same from any refund or export rebate payable to the assessee. In this case even if the interest amount of Rs. 8,08,190/- was recoverable from the appellant, the appellant should at least have been intimated about the same, but from the records it appears there was no such intimation to the appellant. In view of this, the impugned order is not sustainable. The same is set aside and the matter is remanded to the original Adjudicating Authority for denovo decision. In course of denovo proceedings, the appellant should be heard about the interest amount which is due from them and only if it is held to be recoverable, the adjustment can be made. The appeal stands disposed of, as above.
(Dictated and pronounced in open court) (Rakesh Kumar) Member (Technical) PK ??
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