TMI Blog2011 (10) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... P.R. Chandrasekharan, J. Appearance Shri Bharat Raichandani, Advocate for Appellant Shri Sanajay Kalra, A.A.R for Respondents Per P.R. Chandrasekharan The present appeal and stay application are directed against order-in-appeal No. PKS/161/BEL/2010 dated 02.07.10 passed by the Commissioner of Central Excise (Appeals), Mumbai. 2. The appellant M/s. CEAT Ltd. are manufacturer of tyres and other items falling under Chapter 40 of the Central Excise Tariff Act, 1985. During the period of dispute i.e. from 11.8.2001 to 18.08.2004, they had cleared tyres to Original Equipment Manufacturers (OEM in short) at concessional rate of duty under Notification No. 03/2001-CE dated 01.03.2001. Some of the goods so cleared were rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty arises from that day onwards. If that be so, Rule 6 of the said Rules provided for a situation where the goods cleared under concessional rate of duty and not used for the intended purposes, the amount equal to differential duty leviable on such goods but for the exemption and that already paid along with interest and the provisions of Section 11A and Section 11AB of the Central Excise Act shall apply mutatis mutandis for effecting such recoveries. The Apex Court in the case of CCE vs. SKF India reported in 2009 (239) ELT 385 has held that 'the differential duty was paid only later, when the assessee issued supplementary invoices to its customers demanding the balance amount. Seen thus, it was clearly a case of short payment of duty tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licable only when there is short levy or short payment or non-levy or non-payment or erroneous refund of duty and the above section applies only when there is a determination of duty under sub-section (2) or duty has been paid under sub-section (2B) of Section 11A. In the case under consideration, there is no short payment of excise duty coming under the category of Section 11A (2) or Section 11A (2B) and, therefore, the provisions of Section 11AB are not attracted. If the appellant had brought back the goods to their factory, then the goods should have been added in non-duty paid stock and they could have cleared the goods subsequently on payment of appropriate duty. In such an event, no interest liability would have accrued. Merely be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and, therefore, the ratio of judgement does not apply. The learned Counsel for the appellant also submits that the transactions undertaken in this case are very similar to the case covered under Rule 16 of the Central Excise Rules, 2002. Under Rule 16, the assessee can bring back duty paid goods for re-making, re-fining, re-conditioning etc. and the assessee can take CENVAT credit of duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2004 and utilize this credit in accordance thereto. Subsequently after re-making/refining/re-conditioning etc. the goods can be removed and the manufacturer has to pay duty liability on re-conditioned goods at the appropriate rates at the value determined under the valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect goods are not used) by the manufacturer for the intended purpose, the manufacturer shall be liable to pay the amount equal to the difference between the duty leviable on such goods but for the exemption and that already paid, if any, at the time of removal from the factory of the manufacturer of the subject goods, along with interest and the provisions of Section 11A and Section 11AB of the Central Excise Act, 1944 (1 of 1944) shall apply mutatis mutandis for effecting such recoveries. (Provided that if the subject goods on receipt are found to be defective or damaged or unsuitable or surplus to the needs of the manufacturer, he may return the subject goods to the original manufacturer of the goods from whom he had obtained these and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the premises of the OEM themselves, it does not create an interest liability on the supplier of the goods. Therefore, I hold that the view taken by the lower appellate authority is not sustainable in law in view of the express provision contained in Rule 6 of the Rules, 2001. 6.2 I also notice that in the instant case, the interest has been demanded on the differential duty paid during the period from August, 2001 to August 2004. The differential duty has been discharged during this period and the fact has also been intimated to the department. However, the demand for interest liability has been made vide show-cause notice dated 10.03.2006 i.e. after a gap of more than 1= years. There is no allegation of any suppression on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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