TMI Blog2010 (9) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... f law having been declared clearly by the Apex Court, the appellants have not discharged the said liability even in relation to the year 2007-08 till this day - Appeal is dismissed - E/3031/2009-SM(BR) - 1105/2010-SM(BR)(PB) - Dated:- 27-9-2010 - Justice R.M.S. Khandeparkar, J. REPRESENTED BY : Shri R. Santhanam, Advocate, for the Appellant. None, for the Respondent. [Order (Oral)]. - Heard the learned advocate for the appellants. None present for the respondent, though served. 2. By order dated 18th June, 2010, on account of certain objectionable words used with reference to the impugned order and the authority who has passed the order, the appellants were directed to file the affidavit. Accordingly, the appellants have filed the affidavit. 3. The grievance of the appellants in the affidavit as well as in the memorandum of appeal is that, the lower appellate authority without proper application of mind and in a great hurry disposed of the matter without considering various contentions sought to be raised in the matter by the appellants and that, therefore, the appellants considered the impugned order to be illegal, arbitrary, perverse, baseless, without fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Apex Court having declared the view expressed by the Bombay High Court being not correct, non-consideration of the decision of the Punjab Haryana High Court by the Commissioner cannot be held to be disclosing non-application of mind or any sort of illegality or even irregular exercise of jurisdiction. The decision of the Apex Court, on the issue in question, is binding and no decision of any Court including the High Courts on the same issue taking a contrary view can be said to be binding upon the lower authorities. Article 141 of the Constitution of India is very clear in that regard. Being so, there was absolutely no justification for the appellants to use obnoxious words with regard to the orders passed by the lower authorities. In fact, on that ground itself the appeal could be dismissed. However, as I have heard at length the learned advocate for the appellants in relation to the merits of the case, I propose to deal with the same rather than rejecting the appeal on the said ground. 6. The issue involved in the matter relates to the liability of the assessee to pay interest on the duty paid on the supplementary invoices which were issued on account of price escalat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther increased amount of duty.] 6. The Apex Court while considering the said provision of law and taking into consideration the provisions of Section 11AA as well as of Section 11A held thus : 7. If the object of the law is to state clearly and unambiguously the obligations of the person whom the law addresses and to spell out plainly and without any confusion the consequences of failure to discharge the obligations cast by the law then the four sections of the Act fall miles short of the desired objective. Even as originally cast the provisions were far from very happily framed and worded. Subjected to amendments from time to time those provisions have now become so complicated that in order to discern their meaning it becomes necessary to read them back and forth several times. We see no reason why the two periods for which interest is leviable may not be put together and dealt with in one consolidated provision instead of being split up in Sections 11AA and 11AB. Also, there is much scope to reorganise all the different subsections of Section 11A and to present the scheme of that section in a more coherent and readable form. 8. Be that as it may. In the case in hand we h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t etc. of 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 of Rules made thereunder with intent to evade payment of duty , under the scheme of the four Sections (11A, 11AA, 11AB 11AC) interest is leviable on delayed or deferred payment of duty for whatever reasons. 11. The payment of differential duty by the assessee at the time of issuance of supplementary invoices to the customers demanding the balance of the revised prices clearly falls under the provision of sub-section (2B) of Section 11A of the Act. 7. In other words, the Apex Court has clearly clarified the law as it stands in terms of the provisions of law comprised under Section 11-AB read with Section 11A and 11AA of the said Act. 8. Section 11AB was introduced under Act 33 of 1996 and came into force from 28th September, 1996. Section 11AA was introduced by Act 22 of 1995 and came into force w.e.f. 26th May, 1995. Section 11AB relates to the subject of interest on delayed payment of duty and Section 11AA is also on the subject of interest on the delayed payment of duty and considering the same how these provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise duty accordingly. However, the party had not paid the interest on these supplementary invoices as per provisions of Section 11AB of Central Excise Act, 1944..............and whereas from the facts mentioned above it appears the said party was fully aware that they were required to pay the interest on differential Central Excise duty paid by them through the supplementary invoices issued by them, even then they had not paid the interest on such differential duty and had thus contravened the provisions of Section 11AB of Central Excise Act, 1944. The party has not informed the department regarding non-payment of interest with the sole intent to evade payment of interest on differential duty and thus the extended period in terms of proviso to Section 11A of Central Excise Act, 1944 becomes invokable . 13. In reply to the said show cause notice and in particular the above quoted contents thereof, it was sought to be responded by the appellants as under : It has been alleged in the show cause notice that NMPL did not inform the Department regarding non-payment of interest with the sole intent to evade payment of interest on differential duty thereby rendering the extended p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Section 11-AB with intent to evade the payment of interest on differential duty. It is pertinent to note that the fact that the appellants did not pay the interest on the differential duty paid by them on issuance of the supplementary invoices as a result of price escalation is neither disputed nor can be disputed. For invocation of extended period of limitation, it is not only the suppression of fact which could be the ground for the same. Even contravention of any of the provisions of the Act with intent to evade the payment of duty can be a ground for invoking the extended period of limitation. 17. It is pertinent to note that, the Apex Court while referring to the provisions comprised under Section 11AB has clearly drawn difference between the liability to pay the penalty and the obligation to pay the interest on delayed or deferred payment of duty for whatsoever reason. Obviously, therefore, the liability clearly required the assessee to pay the interest on any delay in payment of duty for whatever reason it might have been delayed and it includes deferred payment. Even though the assessee had to pay the duty subsequent to the issuance of the supplementary i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invocation of extended period of limitation. Drawing attention to the decision of the Apex Court in the matter of Cosmic Dye Chemical v. CCE, Bombay, reported in 1995 (75) E.L.T. 721 (S.C.), and in particular para 8 thereof, the learned advocate submitted that, there was no intention as such to avoid the payment of duty and hence the extended period of limitation could not have been invoked. He further submitted that, there were divergent views on the main issue taken by different Courts and Tribunal and some were favourable to the appellants which, obviously the appellants followed. In case of divergent views being available, there cannot be any justification for imposition of penalty and hence the authorities have not even imposed the penalty. 19. The above discussion by me, on the issue involved in the matter is in relation to the contention sought to be raised by the appellants about absence of material to justify the invocation of the extended period of limitation, and it has nothing to do with the issue of penalty as rightly pointed out by the learned advocate for the appellants. In view of non-imposition of penalty by the authorities below, question of consideration of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants have not discharged the said liability even in relation to the year 2007-08 till this day. It was, however, sought to be contended by the learned advocate for the appellants that the very first day the appellants had submitted that whatever order the Tribunal may pass in the stay application, the appellants would comply with the same. One fails to understand as to why the appellants require order in stay application to clear the liability which is made very clear by the decision of the Apex Court. Undoubtedly, the appellants are disputing the liability in relation to the year 2006-07 on the ground of bar of limitation. But, certainly, the notice having been issued on 4th March, 2008, nothing prevented the appellants from depositing the amount in relation to the period from 5th March, 2007 onwards. Even that has not been cleared by the appellants. Mere excuse of order dated 18th June, 2010 passed by the Tribunal in stay application in relation to the need for filing of the affidavit cannot be a justifiable ground for delaying compliance of statutory obligations. Indeed, this clearly discloses the conduct of the appellants. 22. For the reasons stated above, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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