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2014 (6) TMI 855 - AT - Central ExciseInterest demand - Valuation of goods - cost of the free issue materials were not included in the value of finished goods - Demand of differential duty - whether interest under Section 11AB of CEA, 1944 is attracted on account of the major portion of differential duty paid in July, 2001 and balance in March, 2003 for the clearances effected during July, 1996 to March, 2001 - Held that:- Under sub-section (1) of Sec. 11AA of the Act, as this provision stood at the material time, an assesse who fails to pay the duty determined under sub-section (2) of Section 11AA of the Act, within 3 months from the date of determined of duty is bound to pay interest at the prescribed rate for the period of delay. Sub-section (2) says that sub-section (1) is not applicable where the duty became payable on or after the date on which the Finance Act, 2001 received Presidential assent. It was on 11/5/2001 that the Finance Act, 2001 came into force. In this scenario, there can be no levy of interest under sub-section (1) of Section 11AA on the amount of duty paid by the assesse for the period upto 10th of May, 2001. In respect of the amount of duty paid for the period from 11/5/2001, interest on duty is leviable under Section 11AB of the Act in as much as sub-section (1) of Section 11AA opens with the clause subject to the provision of Section 11AB . In the result, interest can be levied on that part of the amount of duty which pertains to the period from 11/5/2001 to 30/6//2001. This liability, obviously, is unaffected by the fact that such duty was paid within the period of 3 months prescribed under Section 11AA (1). It is, therefore, held that the appellant is liable to pay interest under Section 11AB of the Act on that part of the amount of duty which pertains to the period from 11/5/01 to 30/6/01 and such interest shall be paid for the period from the due date to the date of payment - Decided against assessee. Penalty u/s 11AC - Held that:- Issue of inclusion of value of Moulds supplied free of cost in the value of the finished goods, during the relevant period was unsettled due to conflicting views/decisions on the subject. The said issue got settled only after the Larger Bench decision in the case of Mutual Industries Ltd. (2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI). In view of the judgment in Anil Polymers case (2008 (12) TMI 138 - CESTAT MUMBAI), I find merit in the submission of the Ld. Advocate for the applicant on the issue of allegation suppression and consequent imposition of penalty. Thus, the penalty imposed on the appellant is not sustainable and accordingly, the same is set aside. - Matter remanded back - Decided partly in favour of assessee.
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