TMI Blog2011 (6) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... always relate to the date of removal of the goods thereof. Interest liability would commence from the month succeeding the day on which the duty was due and payable in relation to the goods cleared - Decided against the Revenue. - CE/1205 of 2009 - 477/2011-EX(PB), - Dated:- 13-6-2011 - Hon'ble Shri Justice R.M.S. Khandeparkar, President Hon'ble Shri Rakesh Kumar, Technical Member Appearance: Shri Z.U. Alvi, Advocate for the appellants Shri V. Choudhary, Authorized Departmental Representative (SDR) for the Revenue Per Shri Justice R.M.S. Khandeparkar: We have heard at length the learned Advocate for the appellants and the DR for the respondent, in terms of the order dated 9.11.2010 in Writ Petition No.11005 of 2010 passed by the Hon ble Madhya Pradesh High Court. We have also perused the written submissions filed on behalf of both the parties. The present appeal arises from the order passed by the Commissioner (Appeals), Bhopal on 4.2.2009. By the impugned order, the Commissioner (Appeals) has dismissed the appeal filed by the appellants against the order dated 30.10.2008 of Deputy Commissioner, Bhopal. 2. The appellants supply power generat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as for the appellants themselves to ascertain the value for the assessment of the goods cleared by them as well as to quantify the duty thereon. Being so, it cannot be said that there was any violation of principles of natural justice in the matter of finalisation of assessment. 5. The provisionsof law relating to the assessment of duty are to be found under Rule 6 and 7 of the Central Excise Rules, 2002. Accordingly, the assessee himself is required to assess the duty payable on the excisable goods. When the assessee is unable to determine the value of the excisable goods or to determine the rate of duty applicable thereto, he can certainly request the Excise officer for an order allowing him to pay the duty on the provisional basis. In case, the provisional assessment is allowed, then the assessee has to execute a bond in the prescribed form with surety to ensure the payment of difference between the amount of duty as per the final assessment and the amount of duty provisionally assessed. Rule 7(3) of the said Rules clearly provides that the Assistant Commissioner of Central Excise or Deputy Commissioner, as the case may be shall pass an order as soon as may be, after the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not in dispute that the finalisation of the assessment has been in terms of the variation of the price of the goods as disclosed by the assessee, it cannot be said that there was violation of principles of natural justice for want of show cause notice, nor it can be said that no fair opportunity was given to the assessee to defend. 9. The Apex Court in National Tobacco Co. of India Ltd. case was dealing with the matter relating to the cigarettes cleared by the assessee. Therein, the notices came to be issued to the assessee for short-levy in respect of some brand of cigarettes cleared from the factory. The notices were challenged by the company before Kolkata High Court in Writ jurisdiction. The High Court quashed the notices while holding that the determination as to whether the wholesale market exists at the site of the factory or the premises of the manufacturing or production etc. or its nearest wholesale market or price at which the goods or goods like kind and quality are capable of being sold must necessarily be a complicated question and must be determined carefully upon the evidence and not arbitrarily. Such determination cannot wholly be made ex-parte i.e. to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to the learned Advocate for the appellants, S.K.F. India Ltd. ruling is applicable only in cases where there is short-payment of duty which is recoverable under Section 11A and it would not apply to the differential duty recoverable under Rule 7(3) of the said Rules and the occasion to demand the duty would not arise unless the assessment is finalized. 12. While elaborating the contention on this aspect, the learned Advocate for the appellants submitted that Section 3 of the Central Excise Act, 1944 provides that duties shall be levied and collected in such manner as prescribed. Referring to the decision of the Apex Court in National Tobacco Co. of India Ltd., the Apex Court clearly held that the process of assessment determines whether the levy is short or complete. It is only upon determination of the value of the goods finally on ascertaining the duty that the assessment can be said to be finalized and duty payable can be quantified at a stage of collection thereof which arises subsequent to assessment. Though the term levy seems to be wider than the term assessment , it does not seem to include the stage of collection. According to the learned Advocate, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods, it is collected on the date of removal of the goods, the due date of payment is as prescribed under Rule 8. The provisional assessment does not disturb the factum of levy and relevant due date for payment of duty and Rule 7(4) only grants concession subject to payment of interest. 15. It was further submitted by the SDR that as rightly pointed out by the learned Advocate for the appellants that demand for interest is compensatory in nature and is not penal. The provision regarding finalisation of assessment does not extend the date of levy but it merely takes care of a situation where the final assessment is not feasible at the time of removal of the goods. However, such finalisation of assessment relates back to date of removal of the goods though actual calculation in that regard is done at a later point of time. Reliance is sought to be placed in the decision of the Larger Bench of the Tribunal in the matter of Cadbury India Ltd. vs. C.C.E. Pune I reported in 2008 (232) ELT 224. 16. Placing reliance in the decision in the matter of S.K.F. India Ltd. it is submitted that though the decision does not deal with the issue of charging interest on payment of duty on fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide for charging of interest on the differential amount of duty which becomes payable or refundable upon finalization of all or any class of provisional assessment. In other words, apart from generality of power enshrined under sub-section (1) of Section 37 of the said Act, Sub-section 2(ibb) of Section 37 specifically provides that the Rules may provide for charging interest on differential amount of duty becoming payable consequent to the finalization of provisional assessment. The provision of law comprised thereunder nowhere specifies such Rules shall restrict the levy of interest for the period consequent to finalization of the assessement. Rather it specifies that the Rules may provide for interest on the differential amount of duty becoming payable consequent upon the finalization of assessment. The expression becoming payable would obviously relate to the date on which the duty was required to be paid. Considering the provisions of Section 4 of the said Act, the duty becomes payable on each removal of the goods consequent to the manufacture thereof. Being so, the expression becomes payable under Section 37(2)(ibb) would relate to the date on which the duty was payable i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was not justified in issuing show cause notice without finalizing the provisional assessment. That is not the case in the matter in hand. 21. The decision in Serai Kella Glass Works Pvt. Ltd. was essential relating to the limitation which the Hon ble High Court should observe while dealing with revenue matters in exercise of writ jurisdiction and when adequate alternative remedy is available. Therein, the Hon ble Supreme Court after taking note of the fact observed that after final assessment, a copy of the order on the return filed by the assessee has to be sent to him. The duty has to be paid by the assessee on the basis of the final assessment within 10 days time from the receipt of the return. In those circumstances question issuance of any show cause notice under Section 11A of the said Act does not arise. It is only when the assessee fails to make payment in terms of the finalization of the assessment and if there is short-levy or non-levy of duty, the Department is empowered to take proceedings under Section 11A. Obviously, the conditions attached for the exercise of powers thereunder will have to be complied with. The said decision obviously has no application to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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