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2015 (10) TMI 1290 - CESTAT MUMBAI

2015 (10) TMI 1290 - CESTAT MUMBAI - TMI - MODVAT Credit - cum duty benefit - penalty under Rule 173Q - manufacturing of corrugated galvanised sheet from plain galvanised sheet - held that:- The order of the Commissioner was not set aside, the matter was sent back only for redetermination keeping in view the cum duty benefit and extending the benefit of modvat credit. In view of the said factual position and keeping in view the Explanation 1 of the Section 11AA as also the observation of the Hon .....

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that the said activity amounts to manufacture. Appellant has not been able to produce any judgment taking a contrary view. The fact that the issue has been remanded by the Hon'ble Supreme Court in the case of Vardhaman Industries Ltd. (2008 (3) TMI 51 - SUPREME COURT) is in different context and in any case the Hon'ble Supreme Court has not said that the corrugation will not amount to manufacture. Moreover, we find that the said judgment is of 2008 while the dispute in this case pertains to the .....

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gated galvanised sheet from plain galvanised sheet. A demand notice was issued to the appellant for payment of duty on the corrugated galvanised sheets. Appellants were not paying the duty on the ground that the activity does not amount to manufacture. The case was adjudicated. The Commissioner confirmed the demand. Aggrieved by the said order, appellants filed appeal before this Tribunal. This tribunal took the view that the activity of the appellant amounts to manufacture. However, since the a .....

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,22,322/-. Further, the Commissioner found that the appellant would be eligible for modvat credit of ₹ 43,59,689/-. Thus the effective duty required to be paid by the appellant would be ₹ 2,62,633/-. Commissioner in the impugned order confirmed the said amount of ₹ 2,62,633/-. Further interest under Section 11A was confirmed and a penalty of ₹ 1 lakh was imposed upon the assessee under Rule 173Q of the Central Excise Rules, 1944. Aggrieved by the said order, the appellant .....

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that penalty is imposed under Section 11AA and in view of the decision of the Hon'ble Bombay High Court in the case of Blue Star Ltd. 2010 (250) ELT 197 (Bom), no interest is payable. According to the ld. counsel, the Tribunal has set aside the order of the Commissioner and therefore, the order passed initially no more exists and it is only the impugned order dated 31.03.2005 wherein duty has been determined and since they have paid the duty within three months of the order, no interest is .....

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le Supreme Court in Gujarat Steel Tubes Ltd. 1989 (42) ELT 513 (SC) wherein the Hon'ble Supreme Court has taken the view that galvanisation does not bring in new commodity into existence. He further submitted that thereafter number of judgments of the Punjab & Haryana High Court and this Tribunal has held holding that corrugation amounts to manufacture. However, the Hon'ble Supreme Court in the case of Vardhaman Industries Ltd. 2008 (224) ELT 342 (SC) has kept the issue open and rema .....

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t determined by the first adjudication order of the Commissioner. This order of the Commissioner has been upheld by the Tribunal and this Tribunal has not set aside the said order but the matter was sent back to the Commissioner only for extending the benefit of cum duty as also examining the documents relating to the modvat credit and redetermining the quantum of duty payable. Ld. AR further submitted that in view of the said position, the order of the Commissioner was not set aside and the rea .....

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two case laws quoted are not relevant as these do not pertain to the Central Excise Law but to other laws. The concept of manufacture with reference to the Central Excise Tariff particularly, the new Tariff which was introduced in 1986 is not discussed in the first two case laws. It was further submitted that Tribunal and other authorities have been taking consistent view that the corrugation amounts to manufacture and therefore, the appellant was required to pay the duty which he has not done .....

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fails to pay such duty within three months from the date of determination, he shall pay, in addition to the duty, interest at such rate not below ten per cent and not exceeding thirty-six per cent. per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette on such duty from the date immediately after the expiry of the said period of three months till the date of payment of such duty : Provided that where a person chargeable with duty determined u .....

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case may be, the Court, the date of such determination shall be the date on which an amount of duty is first determined to be payable. Explanation 2. Where the duty determined to be payable is increased or further increased by the Commissioner (Appeals), Appellate Tribunal, National Tax Tribunal or, as the case may be, the Court, the date of such determination shall be,- (a) for the amount of duty first determined to be payable, the date on which the duty is so determined; (b) for the amount of .....

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unal in the said remand order directed as under:- 5. Once it is held that the corrugation amounts to manufacture, the appellant would be entitled to take Modvat credit of the duty paid on the inputs used in the manufacture of these goods (see Bharat Wagon & Engg. v. CCE - 2001 (131) E.L.T. 681 (Tri.) = 2001 (44) RLT 557 and other such decisions), subject to the requirement contained in rule relating to modvat credit of evidence being produced on payment of duty on inputs which it utilised in .....

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y price assessable value by deducting the duty element also has to be accepted. The matter has to be remanded to the Commissioner for determination of these two aspects for passing orders in accordance with law after considering the materials which the Counsel for the appellants undertakes to produce within two months from the receipt of this order. 4.2. We also note that para 17 of the Bombay High Courts judgement in the case of Blue Star Ltd. (supra) reads as under:- 17.Section 11AA has two ex .....

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r further increased two situations are set out. For the amount of duty first determined to be payable it is the date on which the duty was first determined and in so far as the increase of duty is concerned, the date on which the increased amount of duty is payable. So also in the case of further increase the date of the order on which the amount is further increased. The Explanation, therefore, gives the intent of the Legislature. The intent of the Legislature appears to be that in a case of in .....

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n an order. That order would be the determination and/or ascertainment of duty. The relevant date for commencement of time the interest would be from the date the duty is determined if not paid within three months. Once there be an order, setting aside the entire order of determination there is no ascertained duty payable. In the instant case, therefore, though there was original order passed on 14th June, 1993 that was set aside on 14th July, 2000. The matter was before the A.O., for fresh dete .....

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matter was sent back only for redetermination keeping in view the cum duty benefit and extending the benefit of modvat credit. In view of the said factual position and keeping in view the Explanation 1 of the Section 11AA as also the observation of the Hon'ble Bombay High Court in first para 17 quoted above, we are of the view that the appellant is required to pay interest under Section 11AA on the redetermined duty of ₹ 2,62,633/- with reference to the date of passing of the first or .....

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