TMI Blog2013 (8) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany [2012 (1) TMI 88 - Delhi High Court] and Gujarat High Court in Gujarat Narmada Fertilizers Company Limited [2012 (4) TMI 309 - GUJARAT HIGH COURT]. These judgments have relied upon the decision of the Supreme Court approving the view of the tribunal in TVS Whirlpool Limited [1999 (10) TMI 701 - SUPREME COURT OF INDIA] - The period of limitation prescribed for demand of duty under Section 11A is normally one year and, in exceptional circumstance of a case falling under the proviso to Section 11A(1), the period of limitation is five years. But that would be applicable only in case of misstatement, fraud, concealment etc., which is not the case here. As such, in the present case, the period of limitation for the demand for duty would be one year. By the same logic, the period of limitation for demand of interest thereon would be one year – Decided in favor of Assessee. - Central Excise Act Case Nos. 48/2012 & 49/2012 - - - Dated:- 2-8-2013 - Sanjiv Khanna And Sanjeev Sachdeva,JJ. For the Appellant : Mr. A. R. Madhav Rao Mr. Aditya Bhattacharya, Advocates. For the Respondent : Mr. Satish Kumar, Sr. Standing Counsel. ORDER Sanjiv Khanna, J. (Oral):- The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 5. By two adjudication orders dated 3rd November, 2009, the contention of the appellant that interest should not be levied or the show cause notices were beyond limitation, was rejected. The appellant did not succeed in first appeal and then approached the Customs, Excise and Service Tax Appellate Tribunal. The tribunal by the impugned order dated 17th August, 2012 has rejected the contention of the appellant and has held that interest was payable. Tribunal in the impugned order has noticed that initially duty had been paid on provisional price but subsequently when the price was revised with retrospective effect, the appellant had issued supplementary invoices for the price difference and on the basis of those invoices they had also paid excise duty on the differential price. It is also recorded that the appellant had paid the differential excise duty on their own and suo motu without any notice or proceedings being initiated by the Revenue. Further, there cannot be any doubt that differential duty was payable as held by the Supreme Court in Commissioner of Central Excise versus International Auto Limited, 2010 (250) ELT 3 (SC). The said decision also observes that interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86) DLT 144 entitled Collector of Customs, Madras v. TVS Whirlpool Limited, in which it was held that the lower authority was right in holding that the demand beyond the period of six months from the clearance of goods, was barred by limitation. This conclusion was arrived at based on the logic that the period of limitation for demanding interest ought to be the same as the period of limitation for demand of duty. This matter was carried in appeal to the Supreme Court. The matter was numbered as Civil Appeal No. 7299-7309/1997. The Supreme Court by an order dated 07.10.1999 held as under:- It is only reasonable that the period of limitation that applies to a claim for the principal amount should also apply to the claim for interest thereon. We find no merit in the appeals and they are dismissed with costs. 5. It is, therefore, clear that the principle adopted by the Supreme Court was that the period of limitation, unless otherwise stipulated by the statute, which applies to a claim for the principal amount should also apply to the claim for interest thereon. If that be the position, the period of limitation prescribed for demand of duty under Section 11A is normally one year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Kwality Ice Cream Company (supra) has held that the identical provision was pari materia to the present Act, i.e., Excise Act should be given same or similar interpretation. 9. The view taken by the Delhi High Court in the case of Kwality Ice Cream Company (supra) has been followed by the Punjab and Haryana High Court in Commissioner, Central Excise Commissionerate versus VAE VKN Industries Private Limited (CEA No. 67/2011 (O M) decided on 17th April, 2012. In this decision, it has been held as under:- 6. There is no dispute that assessee has paid the differential duty on supplementary invoices regularly and has shown the same in the ER-I returns, which were filed regularly before the department, therefore, issuance of show cause notice for interest on the delayed payment should also be within a period of one year as stipulated under Section 11-A of the Act. Therefore, department has absolutely no jurisdiction to issue show cause notice after expiry of the period of limitation for interest on the delayed payment for the period from 2002-03 to 2005-06. Division Bench of Delhi High Court in the case of Kwality Ice Cream Company and another vs. Union of India and others, W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the manner specified in this section, and the period of one year referred to in sub-section (1) shall be counted from the date of receipt of such information of payment. Explanation 1. Nothing contained in this sub-section shall apply in a case where the duty was not levied or was not paid or was short-levied or was short-paid or was erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only clarifies that despite voluntary payment of duty by a manufacturer the liability to pay interest on such delayed payment of duty is not absolved. It, therefore, provides that the manufacturer shall still pay interest on the voluntarily paid duty to the extent of delay as also shall pay further interest on any excise duty demand confirmed by the Excise Officer, over and above what may have been voluntarily paid. To our mind this Explanation cannot be used in interpreting the ambit of the main body of sub-section (2) of Section 11A. The Explanation itself is in the nature of a clarification and is thus a clarificatory provision. 9. In essence, what sub-Section (2) of section 11A provides for is for non-issuance of notice by the Central Excise Officer to the extent a manufacturer might have voluntarily paid duty even before issuance of show cause notice. When Explanation-2 provides that said provision would not apply in case of fraud, collusion, wilful misstatement, suppression and intention to evade duty, it clearly means that sub-Section (2B) is applicable where the normal period of limitation of 1 year is provided. 10. In the present case, when the period of limitation h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases and the show cause notices were belated and barred by limitation. 13. Tribunal in the impugned decision has referred to the decision of the Supreme Court in Commissioner of Trade Tax, Lucknow versus Kanhai Ram Thekedar, 2005 (185) ELT 3 (SC). The said decision arose out of proceedings initiated under the U.P. Sales Tax Act, 1948 (subsequently known as U.P. Trade Tax Act, 1948). After referring to the applicable provisions it was held that levy of interest was automatic under the provisions of the said Act, interest should have been paid voluntarily and by non-payment the respondent therein had become a defaulter. In these circumstances, it was observed by the Supreme Court as under:- 17. Thus, we are of the opinion that the High Court was not justified for deleting the interest levied by the authorities on the ground that no notice was served. In this view, the impugned judgment would normally be unsustainable. However, as already noticed, the respondent-assessee has specifically urged that the subsequent proceedings to the assessment is barred by limitation and that even though the order was passed on 6.6.1986 imposing tax liability etc., the assessing authority had pass ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
