Customs, Excise and Gold Tribunal - Bangalore
Sampre Nutritions Ltd. vs The Commissioner Of Central Excise And ... on 22 May, 2006
ORDER T.K. Jayaraman, Member (T)
1. These appeals have been filed against the (1) OIO No. 06/2005 dated 28.02.2005 and (2) OIA No. 55/2005 dated 29.04.2005 passed by the Commissioner of Central Excise and the Commissioner of Central Excise (Appeals), Hyderabad-IV Commissionerate. In these orders, duties paid through CENVAT account by the appellants during the period of forfeiture of fortnightly payment facility has been demanded. Penalties have also been levied.
2. The issue involved in both these appeals is one and the same. Therefore, we are taking up the matter for disposal in this order. The appellants discharged Central Excise duty on fortnightly basis as per the Rules, but, it so happened that on certain occasions, they defaulted in the payment of duty. The learned Counsel pointed out that on three occasions, there were defaults by the appellants. However, on two occasions, the Competent Authority issued a letter granting personal hearing and he did not pass any speaking order for forfeiture of the fortnightly payment of duty. In the third case, the order No. 07/2001 dated 10.05.2001 was passed for forfeiture of the fortnightly payment of duty with retrospective effect. However, the appellants approached the Commissioner (Appeals), who gave an order in favour of the party in his OIA No. 176/2004 dated 24.11.2004. The contention of the Revenue is that once there is forfeiture of the facility of fortnightly payment of duty, during the period of forfeiture, duty should be discharged only by PLA and not through CENVAT credit. The Revenue has not filed any appeal against this order. But, on the same set of facts, Revenue initiated proceedings, which culminated in the order of the Commissioner of Central Excise in OIO Nos. 06/2005 dated 28.2.2005. In these proceedings, the duty debited through CENVAT credit of Rs. 64,83,4317-was demanded besides equal penalty Under Section 11AC and a penalty of Rs. 5 lakhs under Rule 173Q in respect of appeal E/441/2005. In appeal E/674/2005, duty debited through Cenvat credit of Rs. 18,19,704/- was demanded and penalty of Rs. 5,00,000/- was imposed.
3. It is the submission of the learned Counsel Shri M.S. Nagaraja that in these cases, first, there was a violation of the Principles of Natural Justice, in view of the fact that forfeiture was effected without passing a speaking order. Again even when the appellants had an order in their favour in the OIA, which was not appealed against, the Revenue again proceeded against them second time. This is not admissible. This is barred by the principles of res judicata as held in various judicial decisions like Nestle India Ltd. v. CCE, Chandigarh-II 2004 (176) ELT 314 (Tribunal-Del.) which relied on a large number of decisions.
4. Moreover, the it was pointed out that the Hon'ble Bombay High Court, in the case of Lloyds Steel Industries Ltd. v. UOI and the Kerala High Court, in the case of Thanikkudam Bagawati Mills Ltd. and Ors. v. CCE, Calicut - Order dated 26.10.2005, have held that it is perfectly admissible to make payment of duty through utilization in the cenvat account even during the period of forfeiture of the facility of fortnightly payment. Therefore, even on merits, the appellants are within the rights to have discharged their duty liability through Cenvat account. Hence, they are not liable for payment of duty again on demand and also for payment of any penalty on discount and interest on discount.
5. The learned SDR, Shri Ganesh Havanur, reiterates the orders of the lower authority.
6. We have carefully gone through the records of the case carefully. It is seen that the appellants, in Appeal No. E/441/2005 were already having a favourable order from the Commissioner (Appeals) in OIA No 176/2004 dated 24.11.2004 setting aside the order of the lower authority. However, on the same set of facts, we find that the Commissioner has proceeded against them. In our view this is not correct. This is not admissible in view of the decisions in the case of Nestle India Ltd. (supra). Moreover, the Bombay High Court and the Kerala High Court have given a very clear finding that even after default, payment of duty through cenvat credit is admissible even during the period of forfeiture of the facility of fortnightly payment and is not against the rules. In E/674/2005 also, the Revenue has demanded duty on account of the fact that the appellants had paid duty through Cenvat credit after the default. Moreover, the Principles of Natural Justice have been violated by not giving a speaking order in two instances. The Commissioner (Appeals) decided the issue in favour of the appellants.
The OIA was not challenged. However, on the same issue, fresh proceedings were initiated. This is barred by Res Judicata. On a careful consideration of the matter, we feel that the issues are also squarely covered by the decisions of the Hon'ble Bombay and Kerala High Courts (cites supra). Hence, we allow both these appeals with consequential relief if any.
(Pronounced and dictated in open Court)