Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S. Iocl (Marketing Division) on 13 January, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.E/107/2008
(Arising out of Order-in-Appeal No.50/B-I/2007 dated 06.12.2007 passed by the Commissioner (Appeals), Central Excise, Customs and Service Tax, Bhubaneswar)
Commissioner of Central Excise, Customs & Service Tax, BBSR-I
Applicant (s)/Appellant (s)
Vs.
M/s. IOCL (Marketing Division) Respondent (s)
Appearance:
Shri A.Roy, Suptd.(AR) for the Appellant (s) Shri Hemant Karnani, Asst. Manager (Finance) for the Respondent (s) CORAM:
Honble Shri P.K.Choudhary, Member (Judicial) Date of Hearing/Decision:-13.01.2017 ORDER NO.FO/A/75050/17 Per Shri P.K.Choudhary
1. Revenue has preferred this appeal against the impugned order wherein the Lower Appellate Authority had allowed the assessees appeal by setting aside the Order-in-Original on the ground of time barred alone.
2. Shri Hemant Karnani, Assistant Manager (Finance) appearing on behalf of the respondent company submitted that the issue in the present appeal is regarding demand of interest of Rs.23,55,718/- calculated @ Rs.1000/- per day for the period of delay in payment of duty. He also submitted that the Honble Commissioner (Appeals) vide impugned order had set aside the demand of interest relying on the decision of Honble High Court of Rajasthan in the case of Lucid Colloida Ltd. vs. UOI reported in 2006-TIOL-250-HC-Raj CX. Against the impugned order the appellant Revenue filed an appeal before the Tribunal on 3rd March, 2008 and subsequently also filed revision application before the Revenue Authority on 22.05.2008. A final order being Order No.1381/10-CX of Govt. of India dated 03.09.2010 has been passed whereby both the orders i.e. Order-in-Original and Order-in-Appeal passed by the Lower Authorities have been set aside and the matter has been remanded back to the Adjudicating Authority for de-novo adjudication. A copy of the order has been filed along with the written submission and placed on record.
3. In view of the aforesaid order, the Additional Commissioner of Central Excise, Customs and Service Tax, BBSR-I, passed the de-novo order vide Order-in-Original No.Addl.Commr/BBSR-I/CE/Denovo/04/2012 dated 22.02.12 and modified the demand of interest of Rs.23,55,718/- to Rs.1,73,708/-. A copy of the said order has also been filed along with written submission and placed on record. Relevant portion of the said order is reproduced below:
7. The applicant Commissioner has requested for condonation of delay in filing revision application as they had earlier filed appeal before CESTAT wrongly. In this case, the order-in-appeal was received by department on 12.12.07 and revision application was required to be filed by 12.3.2008. However, there is provision to condone delay upto 3 months if justified reasons exist for such delay. In this case, the delay can be condoned as the revision application was filed on 22.5.2008 before the expiry of 3 months condonable period. Therefore, Government in exercise of powers vested under Section 35EE of Central Excise Act, 1944 condone the delay in filing revision application.
8. Applicant Commissioner has contended that duty liability is not contested by the respondent and therefore interest on delayed payment is payable in terms of section 11AB and the time limitation prescribed under Section 11A of Central Excise Act, 1944 does not apply for recovery of interest as no time limit is prescribed under section 11AB. Government notes that there is no time limit specified under Section 11AB for recovery of interest. The interest becomes payable automatically when there is delayed payment of duty. As such the demand of interest is not hit by time limitation prescribed under Section 11A of Central Excise Act, 1944. Respondent has relied upon the judgment of Rajasthan High Court in the case of Lucid Colloida Ltd. Vs UOI reported as 2006-TIOL250-HC-Raj CX against which department has not preferred any appeal. The relevant para no.15 of said judgment is reproduced below:-
15. Accordingly, the writ petition is allowed. The part of Rule 8(3) which includes expression at the rate of two per cent, per month or rupees one thousand per day, whichever is higher is held to be invalid. Consequently, interest chargeable on delayed payment had to be only at the rate of 2% per month or for the matter 24% per annum as notified by the State Government in terms of the Section 11AB, which is between the permissible limits in terms of Section 11AB. Consequently, the demand notices are quashed and interest on delayed payment has to be recomputed only to the extent it is referred to the rate of interest @2% per month or 24% per annum under Rule 8(3). In view of said judgment, interest chargeable on delayed payment had to be only at the notified rate of interest in terms of Section 11AB.
9. Respondent have also pointed out that during year 2002-2003, in rule 8(3) of Central Excise Rule, 2002 there was no provision to charge Rs.1000/- per day. The said provision was incorporated in 2003-2004. The factual position was not verified by adjudicating authority. Government observes that adjudicating authority has not given any finding on this point though it was mentioned in adjudication order. Similarly, the above mentioned High Court order was also not considered by adjudicating authority which against the principle of judicial discipline.
10. In view of above discussions, Government set aside the impugned order-in-appeal and order-in-original and remands the case back to adjudicating authority for de-novo adjudication keeping in view the above said judgement of Honble High Court of Rajasthan, after affording reasonable opportunity of hearing to the respondent.
11. Revision application is disposed off in terms of above.
4. In view of the above discussions the appeal filed by the Revenue before this forum becomes infructuous and accordingly the same is dismissed as infructuous.
(Operative part of the order was pronounced in the open court.) S/d.
(P.K.Choudhary) MEMBER (JUDICIAL) ss