Custom, Excise & Service Tax Tribunal
M/S. Govardhan Das, P..A. (Cal) vs Commr. Of Central Excise, Kolkata-Ii on 19 January, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EAST REGIONAL BENCH : KOLKATA
Excise Appeal No: 100/09
(Arising out of the Order-in-Original No.59/DENOVO/COMMR./CE/KOL-II/adjn/2008-09 Dated-11/12/2008 passed by the Commissioner of Central Excise, Kolkata-II)
M/s. GOVARDHAN DAS, P..A. (CAL)
APPELLANT(S)
VERSUS
Commr. of Central Excise, Kolkata-II
RESPONDENT(S)
APPEARANCE Sri Agnibesh Sengupta, Advocate FOR APPELLANT(S) Sri S. Mukherjee, Supdt. (A.R.) FOR THE RESPONDENT(S) CORAM:
SHRI S.K. MOHANTY, HONBLE JUDICIAL MEMBER DATE OF HEARING: 19/01/2018 Date of Pronouncement:19/01/2018 FINAL ORDER NO.:F/O 75100/2018 Per SHRI S.K. MOHANTY This is the second round of litigation before the Tribunal.This Tribunal vide order No. S-825/A-556/KOL/06 dated-3/7/2006 has remanded the matter to the Adjudicating Authority for de novo adjudication on the points mentioned in the said order. The relevant paragraph in the order dated 3/7/2006 is extracted herein below:
We find that the Tribunal in the decision referred (supra) has also held that extended period cannot be invoked in as much as the Naval Authorities has been issuing certificates and as such, there was a bonafide belief. Demand is required to be confirmed for the period which falls within the limitation period. Even for that demand, the appellant would be entitled to the benefit of Modvat credit of duty on the inputs and to the benefit of exemption notification in respect of supplies made on the existing vessels. We find that though the above all points were raised, they were not considered by the Commissioner for which purposes we set aside the impugned order and remand the matter to the Commissioner for fresh decision. Stay petition also gets disposed off.
3. Pursuant to the above remand direction of the Tribunal, the original authority took up de novo adjudication proceedings and passed the order-in-original dated- 11/12/2008 (for short, the impugned order), in confirming the duty demand of Rs.5,63,030/- alongwith interest. Further, the impugned order has also imposed penalty of equivalent amount under Section 11AC of the Central Excise Act, 1944. Feeling aggrieved with the said impugned order, the appellant has preferred this appeal before the Tribunal.
4. The Ld. Advocate appearing for the appellant submits that the adjudicating authority has not specifically dealt with the issue of limitation aspect, though, specifically directed by the Tribunal vide order dated 3/7/2006 for consideration. In this context, he referred to the said order of the Tribunal to state that the normal period of limitation should be counted from the period July, 2000 to March, 2001. Thus, he submits that the impugned order, considering the period from April, 2000 to March, 2001 is not sustainable, in as much as, the period from April to June, 2000 is beyond the normal period and should not be covered under the proviso to Section 11A of the Act. He further submits that since there is no element of suppression, fraud, wilful mis-statement, with intent to evade payment of Central Excise duty, the Provisions of Section 11AB and Section 11AC of the Central Excise Act, 1994 shall not be applicable and the appellant will not be exposed to the liability of interest and penalty.
It is his further submission that since for the earlier period i.e. 1994 to 1999, the Department had issued the show cause notice by invoking the extended period of limitation, subsequent Show
Cause Notice (SCN in the present case) cannot be issued again by invoking the extended period. The Ld. Advocate has relied on the judgment of the Honble Supreme Court in the case of M/s. Nizam Sugar Factory Vs. Collector of Central Excise, A.P. reported in [2006 (197) ELT 465 (S.C.)] and ECE Industries Ltd. Vs. Commr. of Central Excise, New Delhi reported in [2004 (164) E.L.T. 236 (S.C.)], to justify such stand.
5. On the other hand, the Ld. D.R. appearing for the Revenue reiterates the findings recorded in the impugned order.
6. Heard both sides and examined the case records. I find that the Tribunal vide order dated 3/7/2006 has recorded the submissions of the appellant that one year period should commence from July, 2000 to March, 2001. Further, on perusal of the impugned order, I find that the Ld. Adjudicating Authority has taken into consideration the clearance value for the whole of the Financial Year 2000-2001. Since the Show Cause Notice was issued on 5/7/2001 and served on 9/7/2001 on the appellant, the normal period of limitation should commence from 1st July, 2000. Accordingly, the demand for the period April to June, 2000 cannot be confirmed against the appellant. In context with applicability of the extended period of limitation, the Honble Supreme Court in the case of Nizam Sugar Factory (supra) held that when all relevant facts are in the knowledge of the Department, when the first show cause notice was issued, while issuing subsequent show cause notices, the suppression of facts cannot be alleged again. Therefore, the original authority is directed to compute the actual duty liability within the normal period, which should be paid by the appellant.
7. The provisions regarding payment of interest on delayed payment of duty and imposition of penalty for short levy or non-levy of duty, in certain cases, are contained in Section 11AB and Section 11AC respectively of the Central Excise Act, 1944. The relevant statutory provisions existed at the material time, are extracted herein below:
[11AB. Interest on delayed payment of duty (1) Where any duty of excise has not been levied or paid or has been short-levied or short paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, the person liable to pay duty as determined under sub-section (2) of section 11A shall, in addition to the duty, be liable to pay interest as such rate not below ten per cent and not exceeding thirty per cent per annum, as is for the time being fixed by the Board, from the first day of the month succeeding the month in which the duty ought to have been paid under this Act or the rules made thereunder or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2) of section 11A, till the date of payment of such duty. . [11AC.Penalty for short-levy or non-levy of duty in certain cases. Where any duty of excise has not been levied or paid or has been short levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of section 11A, shall also be liable to pay a penalty equal to the duty so determined.
8. On perusal of the above statutory provisions, it reveals that interest under Section 11AB of the Act can be imposed only under the circumstances, where short levy or short paid duty is by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act or the Rules made therein. It is an admitted fact on record that the appellant had not indulged into the activities of fraud, collusion or suppression, with intent to defraud the Govt. revenue. The said fact is evident from the earlier order dated-3/7/2006 of the Tribunal. Since the Department has not filed any appeal against the order dated-3/07/2006, the same has attained finality. Thus, the findings recorded by the Tribunal in the said order cannot be disturbed at this juncture to take a contra view. Similarly, the provisions of Section 11AC of the Act is also applicable in case of mis-statement, suppression of facts etc., which are admittedly absent in this case. Thus, the appellant cannot be exposed to the liability of interest and penalty as confirmed in the adjudication order. Accordingly, the interest and penalty confirmed in the adjudication order is liable to be set aside.
9. In view of above discussions, the appeal is disposed off in following terms:
a) Matter remanded to Adjudicating Authority for quantification of the actual duty demand within the normal period i.e. July, 2000 to March, 2001, which should be paid by the appellant.
b) Impugned order is set aside and the appeal is allowed to the extent of interest and penalty confirmed in the adjudication order.
(Dictated and pronounced in the open Court) Sd/-
(S.K. MOHANTY) JUDICIAL MEMBER k.b/-
Excise Appeal No: 100/09 2