Custom, Excise & Service Tax Tribunal
Johnson Lifts Pvt. Ltd vs Commissioner Of Customs & Central ... on 4 February, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/1358/10 [Arising out of Order-in- Appeal No. SR/142/NGP/2010 dtd. 27/4/2010 passed by the Commissioner of Customs & Central Excise (Appeals), Nagpur] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) =======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should 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 : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
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Johnson Lifts Pvt. Ltd.
:
Appellants
VS
Commissioner of Customs & Central Excise Nagpur
:
Respondent
Appearance
Ms. Aparna Hirandagi, Advocate for the Appellants
Shri. N.N. Prabhudesai, Superintendent (A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 4/2/2016
Date of decision: /2016
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Order-in- Appeal No. SR/142/NGP/2010 dtd. 27/4/2010 passed by the Commissioner of Customs & Central Excise (Appeals), Nagpur, wherein Ld. Commissioner(Appeals) upholding the Order-in-Original No. 06/2010/DEMST/D-II dated 12/1/2010 rejected the appeal of the appellant.
2. The fact of the case is that the appellant is engaged in the manufacture of Parts of Lifts which is used by them and discharging the excise duty thereon under Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. In respect of goods cleared during the period 2006-07 they paid duty on the basis of costing of the goods which was during the preceding financial year i.e 2005-06 and had not paid differential duty as per the costing for the current year i.e. 2006-07. Later, to arrive at the correct value of the excisable goods, the appellant calculated the cost as per CAS-4 certificate and it was noticed that there is differential duty of Rs. 21,65,393/- BED and Rs. 48,860/- Education Cess and there is excess payment of Central excise duty of rs. 1,41,028/- BED and Rs. 4,231/-Ed. Cess. The appellant on their own adjusted the amount of excess payment of Central Excise duty of Rs. 1,41,028/- BED and Rs. 4,231/- Ed. Cess against short paid differential duty BED Rs. 21,65,393/- and Education Cess Rs. 48,860/- and paid remaining differential duty BED Rs. 20,24,365/- Ed. Cess Rs. 40,487/- and Secondary Higher Education Cess Rs. 4,142/-. The appellant paid differential duty in the month of October, 2007 after the short payment had been pointed out in the departmental audit. On scrutiny of the record, it was alleged in the show cause notice that as there was no provision of suo moto availement of credit of duty, appellant ought to have made an application to the competent authority for refund of payment of duty as per the provisions of Section 11B of Central Excise Act, 1944 and appellant should not have suo moto adjusted the total amount of duty of Rs. 1,45,259/- against the demand of duty. Show cause notice was adjudicated and demand was confirmed denying the adjustment of excess duty paid by the appellant on the ground that in respect to excess duty, refund claim under 11B should have been filed hence amount as paid stands recoverable. Aggrieved by the order-in-original, appellant filed appeal before the Commissioner(Appeals) who rejected the appeal of the appellant, therefore appellant is before me.
3. Ms. Aparna Hirandagi, Ld. Counsel for the appellant submits that the appellant time and again requesting the department for their option of provisional assessment as per Rule 7 of Central Excise Rules, 2002. In this regard she referred to letter submitted to Department by them on 28/8/2006, as per the said letter it is the appellant, who informed the department their intention to opt for the provisional assessment. She further submits that since the duty was being paid on the value arrived at cost construction method, they were discharging the duty liability on the provisional value at the time of clearance, subsequently, on finalization of accounts differential duty was being paid every year. She submits that they paid the duty for the period 2005-06 in the year 2006 on the basis of final cost audit report. Similarly, they were suppose to pay differential duty for the period 2006-07 on the basis of cost audit report. However, on the basis of audit observations appellant calculated the duty, adjusted the excess paid duty and net differential duty of Rs. 20,68,994/-was paid and intimated to the department vide letter dated 22/9/2007. The show cause notice for the amount of excess duty paid which was adjusted against short paid duty, was issued on 18/9/2009 i.e. almost after two years from the payment of duty therefore demand raised in the show cause notice is time bar as no suppression of facts or any malafide is proved against the appellant. She has relied on following judgments:
(a) Indian Oil Corporation Ltd Vs. Commissioner of C. Ex. Haldia [2010(262) ELT 639(Tri. Kolkata)]
(b) Commissioner of C. Ex. Jaipur-II Vs. Bhilwara Processors[2006(205) ELT 996(Tri. Del.)]
(c) Toyota Kirloskar Auto Parts Pvt Ltd Vs. C.C.E. LTU, Bangalore[2012(276) ELT 332(Kar.)]
(d) Mahindra Ugine Steel Co. Ltd Vs. Commissioner of C. Ex. Pune[2012(278) ELT 215(Tri. Mumbai)]
4. On the other hand, Shri. N.N. Prabhudesai, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that appellant have not discharged the differential duty suo moto, whereas, same was discharged only when pointed out by the audit party therefore the appellant has suppressed the fact of short payment of differential duty, accordingly show cause notice was correctly issued invoking the extended period. He relied on following judgments:
(a) Metal Forgings Vs Union of India[2002(146) ELT 241(S.C.)]
(b) C.C. Ex. Belgaum Vs. Mukund Ltd[2009(239) ELT 132(Tri. Bang.)]
(c) Bansali Engg. Polymers Vs. Collector of Central Excise, Bhopal[2000(121) ELT 280(Tri.)]
(d) J.K. Cotton Spg. Wvg. Mills Co. Ltd. Vs. Collr. Of Central Excsie[1998(99) ELT 8(S.C.)]
(e) Commr. of C. Ex. Culcutta Vs. Hindustan National Glass & Indus. Ltd[2005(182) ELT 12(S.C.)]
(f) Modipon Limited Vs. Commissioner of Central Excise, Ghaziabad[2004(174) ELT 126 (Tri. Del)]
(g) Sara Industries Ltd. Vs. Commissioner of Central Excise, Jaipur[2005(188) ELT 398(Tri. Del.)]
(h) J.K. Industries Ltd Vs. Commissioner of Central Excise, Jaipur[2005(188) ELT 398(Tri. Del.)]
5. On careful consideration of submissions made by both sides and perusal of records, I find that the case can be decided on the issue of limitation itself therefore I am not addressing issue on merit. The appellant well in advance informed the department vide their letter dated 28/8/2006 for their option of provisional assessment as per Rule 7 of Central Excise Rules, 2002. Since appellant was paying duty under Rule 8 which is on cost construction method, cost arrived on the basis of cost audit report. In such case only provisional price can be determined and final price on the basis of actual data of over heads can be arrived at in next year only after finalization of accounts of particular financial year. It is fact on record that appellant following method prescribed in the law, discharging the duty on the provisional price at the time of clearance of the goods and it is also fact of record that they paid differential duty for the period 2005-06 in the year 2006-07 on the basis of final cost audit report. As regard the issue of the present case that the duty demand was made for the period 2006-07, the appellant paid duty on the provisional price at the time of clearance in the year 2006-07 and differential duty, if any, arises that can be determined only on the finalization of the cost audit report. However at the time of audit in September, 2007 final cost audit report was not available and for that reason appellant have not paid the differential duty. However on pointed out by the audit team, the appellant have discharged the differential duty of bonfide belief that excess paid duty can be adjusted against short paid duty, difference is the amount for which the show cause notice was issued. It is pertinent to mention that demand of show cause notice arises from differential duty paid by the appellant, in such case department could have issued the show cause notice within one year from the date of payment of differential duty i.e. from September, 2007. However, the show cause notice issued was after almost two years from the date of payment of differential duty. In my view, even the payment of differential duty was made at the right time as the same stands payable only after finalization of cost audit report. Cause of action started from the date when the differential duty paid by the appellant, nothing has prevented the department to issue a show cause notice within one year from the date of payment of excise duty. In this fact, I am very clear in my mind that there is no suppression of fact, fraud and mis-statement etc on the part of the appellant therefore demand is patently time bar. I therefore set aside the impugned order on limitation and allow the appeal of the appellant.
(Order pronounced in court on ___________________) Ramesh Nair Member (Judicial) sk 7 E/1358/10