TMI Blog2011 (3) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... Akil Kureshi, J. (Common Oral)]. Leave to amend Tax Appeals in terms of draft amendment presented today. Consequently, the appellant is permitted to reframe the questions in paragraph No. 2 of the Appeals. 2. In this group of appeals common question of law in similar factual background arises. In response to the notice of final disposal issued by this Court on 13-1-2011, learned advocate Mr. Nanavati appeared for the respondent. We have, therefore, heard learned advocates for the parties and propose to dispose of all the appeals by this common order. 3. Revenue has challenged the common judgment of Customs Excise Service Tax Appellate Tribunal (CESTAT for short) dated 7-8-2009 [2010 (261) E.L.T. 495 (Tribunal)] raising following questions for our consideration :- 2[a] Whether in the facts and circumstances of the case the Tribunal has committed substantial error of law by entertaining appeal of the respondent even though jurisdiction of the Tribunal is expressly barred under clause (b) of first proviso to section 35B(1)(b) of the Central Excise Act, 1944? 2[b] Whether in the facts and circumstances of the case the Tribunal has committed substantial error of law by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that Revenue s case is based upon the Alert circular issued by the Board in the year 2006, indicting that M/s. Parshwanath Impex is a non-existing unit. I have seen said Circular. Apart from the fact that the Circular is to the effect that the listed units have been found to be non-existent/fake and bogus, there is no indication of any time in the said alert Circular. I also note that there is nothing on record as to whether the said M/s. Parshwanath Impex had actually paid the duty to the Revenue or not. This fact is easily verifiable from the records of Central Excise department. No efforts have been made by the authorities below to that effect. Even the appellant have not made any effort to show that the said manufacturer was in existence in the year 2003-04, when they conducted their business with them. The Hon ble Gujarat High Court in the case of Sheela Dyeing Printing Mills Pvt. Limited v. CCE, Surat [2008 (232) E.L.T. 408 (Gujarat)] has held that it is for the assessee to take reasonable steps to ensure the identity and address of the suppliers. It is also not understood that as to how the rebate claim was sanctioned, if the manufacturer was a fictitious party during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating authority; (b) an order passed by the [Commissioner (Appeals) under section 35A; (c) an order passed by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) ( hereinafter in this Chapter referred to as the Board) or the Appellate [Commissioner of Central Excise] under section 35, as it stood immediately before the appointed day; (d) an order passed by the Board or the [Commissioner of Central Excise], either before or after the appointed day, under Section 35A, as it stood immediately before that day : [Provided that no appeal shall lie to the Appellate Tribunal and the Appellate Tribunal shall not have jurisdiction to decide any appeal in respect of any order referred to in clause (b) if such order relates to,- (a) a case of loss of goods, where the loss occurs in transit from a factory to a warehouse or to another factory, or from one warehouse to another, or during the course of processing of the goods in a warehouse or in storage, whether in a factory or in a warehouse; (b) a rebate of duty of excise on goods exported to any country or territory outside India or on excisable materials used in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that such rebate was claimed on the basis of non-genuine documents and issued show cause notice to the exporters. At the end, authority, by order in original concluded that such rebate was wrongly granted. In exercise of powers under sub-section (2) of Section 11A, he, therefore, ordered recovery of such rebate, which according to him was fraudulently claimed. He also ordered recovery of interest and penalty. It was this order which was carried in appeal by the respondent exporters before the Commissioner (Appeals). Commissioner (Appeals) therefore, was examining the challenge of the respondent exporters to the order passed by the adjudicating authority regarding recovery of the rebate allegedly fraudulently obtained. The Commissioner (Appeals) also concurred with the view of the adjudicating authority and dismissed the appeals. 15. We are of the opinion that the order of the Commissioner (Appeals) relates to rebate of duty of excise on goods as already noted. Counsel for the respondent-exporters strenuously urged that Section 11A of the Central Excise Act pertains to recovery of duty not levied or not paid or short paid or erroneously refunded and that therefore, order under ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the documents and orders on record. We are of the opinion that the orders of the Commissioner (Appeals) related to rebate of excise duty on goods and, therefore, further appeal to the Tribunal was not maintainable. When the question is one of pure question of law and when it pertains to jurisdiction of a Court or Tribunal, mere fact that such question was not raised before the Court below would not prevent us from examining the question. 19. In the result, we answer the first question in favour of the appellant and on that basis hold that appeals were not maintainable before the Tribunal. When we have concluded that the appeals were not maintainable, we refrain from going into the second question raised by the Revenue which pertains to the merits of the order passed by the Tribunal. 20. Nothing stated in this order shall preclude the respondents from availing further remedy against the order passed by the Commissioner (Appeals) in accordance with law. 21. In the result, all appeals are allowed by quashing and setting aside all orders of the Tribunal. 2011 (268) E.L.T. 344 (Kar.) IN THE HIGH COURT OF KARNATAKA AT BANGALORE N. Kumar and Ravi Malimath, JJ. COMMISSION ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This appeal is by the revenue challenging the order passed by the Tribunal holding that the assessee is not liable to pay interest on differential duty. 2. The assessee-M/s. Presscom Products is a manufacturer of excisable goods falling under Chapter sub-heading No. 8714.00 of the Schedule to the Central Excise Tariff Act, 1985. They preferred a refund claim of Rs. 27,802/- in respect of interest amount paid by them under protest on the differential duty paid on the supplementary invoices raised during the months of July, September and November 2003 due to revision in price of their products after the dates of clearance. Therefore, a notice dated 14-9-2004 was issued to them calling upon them to show cause why the refund claim of Rs. 27,802/- being the interest paid on the delayed payment of differential duty through supplementary invoices should not be rejected on the ground that they had under valued the goods by not including the revised price of components though the fact of revision was known to them at the time of clearance of goods. 3. The adjudicating authority rejected the claim for refund of interest. It held Section 11AB specifically includes provisions for inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on a judgment of the Division Bench of this Court in the case of Commissioner of Central Excise, Bangalore-III v. Bharat Heavy Electricals Limited [2010 (257) E.L.T. 369 (Kar.) where it is held that, the provisions envisaged under Section 11AB of the Act are not applicable to the facts of the present case as in the instant case there has been no determination of the duty nor there has been short payment of duty under sub-section (2B) of Section 11A. Section 11AB is applicable and interest on delayed payment of duty arises only when any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded. Therefore he submits the judgment of the Tribunal is in consonance with the aforesaid judgment and does not call for any interference. 9. Section 11A of the Act provides for recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. However, by Act 14/2001 sub-section (2B) was inserted which came into effect from 11-5-2001. It reads as under : - (2B) Where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person, chargeable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Gazette, from the first date of the month succeeding the month in which the duty ought to have been paid under this Act, or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2), or sub-section (2B), of Section 11A till the date of payment of such duty. Therefore, Section 11AB provides for interest on delayed payment of duty. Explanation (2) makes it clear this provision regarding interest on delayed payment of duty equally applies to the payment of duty under sub-section 2B of Section 11A. Therefore, whatever may be the reason for the delay in payment of duty and even in a case where duty is paid even before the issue of a show cause notice claiming duty under sub-section (1) of Section 11A once the duty is not paid on the due date, the liability to pay interest on such delayed payment of duty becomes effective automatically. In the scheme of the Act, no provision is made or no circumstances is carved out for excluding the payment of interest on delayed payment of duty. In fact, this question arose for consideration before the Apex Court in the case of Commissioner of Central Excise v. SKF India Limited [2009 (239) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the non-payment or short payment etc., of duty is by reason of fraud, collusion or any willful 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. 11. Following the aforesaid judgment, the Apex Court in the case of Commissioner of Central Excise v. International Auto Limited [2010 (250) E.L.T. 3 (S.C.)] has held as under : - 8. Section 11A of the Act deals with recovery of duty not levied or not paid or short-levied or short-paid. The said section, which stood inserted by Act 25 of 1978, underwent a sea change when Parliament inserted major changes in that section vide Act 14 of 2001 with effect from 11th May, 2001 and Act 32 of 2003 with effect from 14th May 2003, It need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of interest and penalty. To the said show cause notice, reply has been given by the assessee by contending that in the first place, when there was actual removal of the goods and the appropriate duty has been paid based on the price of the goods. In the second place, when there was a transaction when there was escalation in the cost of goods with regard to the said price variation also there had been a payment of duty and hence, there was no delay in payment of duty. Having regard to the contents of the show cause notice and the reply, we are of the view that in the first instance there has been no demand made for payment of duty. In fact such a demand could not have been made considering the fact that the respondent-assessee had paid the duty on the difference in the price and therefore, the differential duty was paid for the relevant period. In the circumstances, the provisions envisaged under Section 11AB of the Act are not applicable to the facts of the present case as in the instant case there has been no determination of the duty nor there has been short payment of duty under sub-section (2B) of Section 11A. Section 11AB is applicable and interest on delayed payment of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. 13. The said judgment rendered by this Court is contrary to the law declared by the Apex Court in the aforesaid two judgments. Further, the said Judgment does not take into consideration the explanation to sub-section (2B) of Section 11A and accordingly, it is a judgment per incuriam . Therefore, the law laid down by this Court in the aforesaid judgment is not a good law. 14. The aforesaid statutory provisions and the law declared by the Apex Court in the aforesaid two judgments make it clear that, interest is leviable on delayed or deferred payment of duty for whatever reasons. Sub-section (2B) of Section 11A provides that the assessee in default may, before the notice issued under sub-section (1) is served on him, make payment of the unpaid duty on the basis of his own ascertainment, or as ascertained by a Central Excise Officer and inform the Central Excise Officer in writing about the payment made by him and in that event he would not be given the demand notice under sub-section (1). Non-issue of a demand notice under sub-section (1) is nothing to do with leviability of interest for delayed payment. Explanation 2 to the sub-section (2B) makes it expressly cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, no interest is leviable is contrary to the aforesaid statutory provision as well as the law declared by the Apex Court and, therefore, it cannot be sustained. Accordingly, it is hereby set aside. The substantial question of law framed in this appeal is answered in favour of the revenue and against the assessee. 18. At this stage it was pointed out that the Central Board of Excise and Customs has issued a circular/instruction F.No. 390/Misc./163/2010-JC dated 20-10-2010 in respect of Litigation - Monetary limits for departmental appeals before CESTAT and High Courts . This is one of the steps taken by the Central Board of Excise and Customs, New Delhi, in their attempt to reduce the Government litigation in pursuance of the National Litigation Policy formulated by the Government of India aiming to reduce Government litigation so that the Government ceases to be a compulsive litigant. The purpose underlying this Policy is to ensure that the valuable time of the Courts is spent in resolving pending cases and in bringing down the average pendency time in the Courts. To achieve this, the Government should become an efficient and responsible litigant. Therefore, for the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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