TMI Blog2010 (9) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... heir own factory located at Moxi and Nandesari. It was found by Revenue that the assessable value adopted by them it had not been worked out at 115% cost of the production duly certified by Cost Accountant. The differential duty worked out to Rs. 26,90,980/- which the appellant deposited in January 2003. Correctness of demand and payment is not being disputed. The only issue involved is whether they are required to pay interest in terms of provisions of Section 11AB of CEA, 1944 for delayed payment of duty. 2. Show cause notice was issued to them on 8-7-2005 which culminated in confirmation of interest at the Commissioner (Appeal) s level whose order has been impugned in this appeal. 3. The appellant s main contention is that the duty paid was not determined under sub-section (2) of Section 11A and as such provisions of Section 11AB are not attracted. However, we find that this contention does not have any merit in view of Tribunal s decision in Gujarat State Fertilizers Chemicals Ltd. v. C.C.E. Vadodara - 2007 (82) RLT 510 (CESTAT - Ahmedabad) = 2007 (218) E.L.T. 238 (Tri. - Ahmd.) wherein it was held that even where the duty paid prior to issuance of show cause notice, inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smission Ltd. v. C.C.E. Ahmedabad - 2006 (194) E.L.T. 99 (Tri-Mumbai) in which case also it was held that there is no difference between the demand arising as a result of invocation of proviso to Section 11A and demand without invoking the same after amendment of Section 11AB in May 2001. Further, the Tribunal being a creation of Statute, is not empowered to go beyond the statute which created it. Since Section 11AB is clear and unambiguous, the Tribunal cannot go into revenue neutrality. 6. In view of the above position, the appeal is rejected. (Pronounced in Court on .) Sd/- (Archana Wadhwa) Member (Judicial) Sd/- (B.S.V. Murthy) Member (Technical) 7. [Order per : Archana Wadhwa, Member (J)]. - The said appeal was earlier heard by me as a Single Member as the same falls under the jurisdiction of Single Member Bench. Vide my order dated 3-3-2008, the matter was referred to Larger Bench. However, when the appeal papers were placed before Hon ble President for constitution of Larger Bench, the Hon ble President ordered as under, which is communicated vide Registrar s letter dated 24-3-2008. The decision in the case of Gujarat State F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as even when the duty stands paid by the appellant, as vide show cause notice issued subsequently, the assessee s liability to pay the duty is being determined. Unless such liability is determined the amount so paid by him may not be available for appropriation. Even Explanation 2 to Section 11AB is to the effect that interest is payable on the amount paid by the person. As such, I do not find any merit in the above contention of the learned advocate appearing for the appellant. 10. However, I find that the differential duty required to be paid by the appellant and actually paid by them subsequently was available as MODVAT credit to their own unit, where such goods were sent. As such, the entire exercise was revenue neutral exercise. Inasmuch as the interest is a bondage or necessary to the principal amount, the same would not be liable to be paid by them as no amount was required to be retained by Revenue. The entire purpose of charging interest is to compensate the payee for delay in payment and to reward the payee for holding him back from the possession and enjoyment of the money due to him. In Mitra s Legal and Commercial Dictionary, Fifth Edition, Interest stand defined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and taking the MODVAT credit of the same at the recipient s unit end, would have chosen to contest the same, such challenge would have succeeded on the point of Revenue Neutrality and in the light of umpteen number of judgments of the Hon ble Supreme Court and the Tribunal. In such a case, the assessee would not have been liable to pay interest, as the principal amount would not have been recoverable. Merely because, the appellant have chosen to pay duty, the fastening of interest liability against them would not be justifiable and would be against the basic principle of law of justice, equity and good conscience. 14. In the case of M/s. Sneh Enterprises v. Commissioner of Customs, New Delhi - 2006 (202) E.L.T. 7 (S.C.), their Lordships observed that it is trite law that while interpreting the statute, the courts not only may take into consideration the purpose for which the same had been enacted, but also the mischief it seeks to suppress. While dealing with a taxing provision, the principle of Strict Interpretation should be applied. The Court shall not interpret the statutory provision in such a manner which would create an additional fiscal burden on a person. 15. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fference between them. Accordingly the difference of opinion is being reformulated as under : DIFFERENCE OF OPINION 18. Where the duty short paid by an assessee is available as credit to the recipient unit of the same assessee, interest in terms of the provisions of Section 11AB is required to be confirmed, as observed by Member (Technical) or no interest would be leviable as observed by Member (Judicial), but as there is already a contra decision, the issue is required to be referred to Larger Bench. Sd/- (B.S.V. Murthy) Member (Technical) Sd/- (Archana Wadhwa) Member (Judicial) (pronounced in Court on 7th Sept., 2010) OPINION OF 3RD MEMBER On Difference of Opinion between the Bench in the case of Bayer ABS Ltd. v. C.C.E., Vadodara in Appeal No. E/40/2007 19. [Order per : M.V. Ravindran, Member (J)]. - This Difference of opinion is listed before me as per the directions of Hon ble President for deciding the points of difference in the matter. 20. The difference of opinion in this regard is as under : Where the duty short paid by an assessee is available as credit to the recipient unit of the same assessee, interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use or forbearance. It is his submission that considering factual matrix of the case, the question of revenue neutrality if was to be examined, demand of differential duty could not have been sustainable. In such circumstances, when the demand of principal amount is not sustainable, the question of payment of interest does not arise. He would cite the following decisions in his support. (i) 2006 (202) E.L.T. 7 (S.C.) - Sneh Enterprises v. C.C. (ii) 2008 (223) E.L.T. 9 (S.C.) - C.C.E. v. Phil Corporation Ltd. (iii) AIR 1992 SC 1846 - Administrator Muni. Corpn., Bilaspur v. Dattatrya Dahankar. (iv) AIR 1986 SC 1499 - Girdharilal Sons v. Balbir Nath Mathur 21.1 It is his further submission that no prejudice is caused to the Revenue, nor any benefit to the appellant by late payment of differential duty and hence, interest being a quasi punishment or penalty for late payment, should not be charged. For this proposition, he relied upon the judgment of Punjab Haryana High Court in the case of C.C.E. v. Rane NSK Steering Systems Ltd. - 2009 (13) S.T.R. 327 (P H). 22. Ld. SDR, on the other hand, submits that the issue is not of revenue neutrality but discharge o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal against such payment, at any subsequent stage, within 45 days from the date of issue of such order, instruction or direction, as the case may be, no interest shall be payable and in other cases the interest shall be payable on the whole of the amount, including the amount already paid. The provisions of sub-section (1) shall not apply to cases where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President. Explanation 1: Where the duty is determined to be payable is reduced by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the Court, the interest shall be payable on such reduced amount of duty. Explanation 2: Where the duty determined to be payable is increased or further increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the Court, the interest shall be payable on such increased or further increased amount of duty. On plain reading of the provisions of Section 11AB as reproduced herein above, interest liability arises, as and when any duty liability is deferred and subsequently discharged. Even when the amount is paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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