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TMI Blog2011 (3) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... stions 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 setting aside order passed by the Commissioner (Appeals) confirming order of the adjudicating authority, by observing absence of material on record as to how the rebate claim was sanctioned by the competent authority?" 4. Facts, as arising in Tax Appeal No. 630 of 2010 for the purpose of this order, can be noticed, which are as under :- 4.1 The respondent exporters had presented before the Excise and Customs authorities its rebate claim of Rs. 2,79,956/- on the basis that the respondent had exported certain goods upon which it was entitled to receive rebate of the excise duty. Such rebate claim was filed by the respondent-exporters on behalf of the manufacturer after obtaining NOC from such manufacturer. Such claim was, in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the relevant period, inasmuch as the relevant provisions of CBEC's Instruction Manual as contained in Para 8.4 are to the effect that before grant of rebate, the authorities are required to be satisfied themselves about the goods cleared for export under the relevant ARE-1 and duty paid character of the said goods. Whether such satisfaction was arrived at by the officers sanctioning the refund or not, is also an issue required to be verified and examined. There is also nothing on record to show that if the goods were not obtained from the said M/s. Parshwanath Impex, then from where the same were received and exported. In my views, the disputed issue is required to be examined from all the above angles. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot 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 the manufacture of goods which are exported to any country or territory outside India; (c) goods exported outside India (except to Nepal or Bhutan) without payment of duty; (d) credit of any duty allowed to be utilised towards payment of excise duty on final products under the provisions of this Act or the rules made thereunder and such order is passed by the Commissioner (Appeals) on or after the date appointed under section 109 of the Finance (No. 2) Act, 1998 : Provided further that the Appellate Tribunal may, in its discretion, refuse to admit an appeal in respect of an order referred to in clause (b) of clause (c) or clause (d) where- (i) in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting 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 challenge before the Tribunal was one pertaining to refund of recovery of excise duty erroneously refunded. 16. We are unable to accept such a contention. It may be that the proceedings pertained to recovery of duty erroneously refunded, the same was in the form of rebate of excise duty on goods exported to any country. In short, therefore, the order of the Commissioner (Appeals) pertains to rebate of duty of excise on goods. We see no distinction in the language used in Section 35B of the Central Excise Act as to bestow jurisdiction of the Tribunal in cases where question of recovery of rebate wrongly granted as compared to the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. COMMISSIONER OF C. EX., BANGALORE-III Versus PRESSCOM PRODUCTS C.E.A. No. 16 of 2008, decided on 7-3-2011 Interest - Delay in payment of duty - Whatever may be reasons for delay, interest is payable even if duty is paid before issuance of show cause notice - Liability to pay interest becomes effective automatically, and there is no provision or circumstances excluding it - Sections 11A(2B), Explanation 2, and 11AB of Central Excise Act, 1944. [para 10] Interest - Duty paid after clearance of goods - It indicates short payment/short levy on date of clearance, hence interest is leviable for loss of revenue - Immaterial that non/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 interest even in a situation of sub-section (2B) of Section 11A of the Central Excise Act, 1944 (for short hereinafter referred to as 'the Act'), where the assessee voluntarily pays the duty short paid. 4. Aggrieved by the said order in original, the assessee preferred an appeal before the Commissioner (Appeals). They contended that, what they had paid was a duty on differential value which was a transacted value revised by their customer due to increase in the cost of raw materials. The duty was determined and paid on the very day of revision of prices and there was no delay in payment of duty. They contended there is no liability to pay interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efunded." 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 with the duty, may pay the amount of duty on the basis of his own ascertainment of such duty or on the basis of duty ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of the duty, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid : Provided that the Central Excise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and then, the Central Excise Officer shall proceed, to recover such amount in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty 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.L.T. 385 (S.C.). Dealing with these provisions, the Supreme Court held as under :- "9. Section 11A puts the cases of non-levy or short levy, non-payment or short payment or erroneous refund of duty in two categories. One in which the non-payment or short payment etc., of duty is for a reason other than deceit the default is due to oversight or some mistake and it is not intentional. The second in which 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 pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1A 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 needs to be mentioned that simultaneously Act 14 of 2001 also made changes to Section 11AB of the Act. In the case of S.K.F. India Limited (supra), it has been, inter alia, held as can be seen from the above quoted paragraphs, that sub-section 2(B) of Section 11A provides that the assessee in default may make payment of the unpaid duty on the basis of his own ascertainment or as ascertained by a Central Excise Officer and in that event, such assessee in default would not be served with the Demand Notice under Section 11A(1) of the Act. However, Explanation (2) to the sub-section makes it clear that such payment would not be exempt f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty. 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 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. The aforesaid circumstances are not applicable in the instant case. Therefore, the issuance of the show cause notice dated 19-10-2004 by invoking the provision of Section 11AB in the instant case is improper and not in accordance with the said section. 7. Learned counsel for the appellant has however relied upon the decision of the Apex Court in the case of Commissioner of Central Excise, Pune v. SKF India Ltd., [2009 (239) E.L.T. 385 (S.C.)] to contend that the said provision is applicable on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vides 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 clear that such payment would not be exempt from interest chargeable under Section 11AB. What is stated in Explanation 2 to sub-section (2B) is reiterated in Section 11AB which states where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person who has paid the duty under sub-section (2B) of Section 11A, in addition to the duty, be liable to pay interest. Interest is levied for loss of revenue on any count. The enhanced duty is on the corrected value of the goods on the date of removal. When the differential duty is paid after the date of clearance, it indicates short-p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd 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 set out therein they have taken a conscious decision as set out in para 5 as under : - "5. The Board has decided that appeals in the Tribunal shall not be filed where the duty involved or the total revenue including fine and penalty is Rs. 1 Lakh and below. Similarly in the case of High Courts appeals should not be filed in cases where the duty involved or total revenue including fine or penalty is Rs. 2 lakhs and below. While deciding the thresholds mentioned above, the duty involved shall be the decisive element. For example, in a case involving duty of Rs. 1 lakh with mandatory penalty of Rs. 1 lakh besides any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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