TMI Blog2015 (12) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... ome due. Therefore, we do not find any infirmity in the orders passed by both the authorities below confirming the interest under the provisions of amended section 11AA. - Decided against Assessee. - E/40135 to 40138/2013, E/40212 & 40214 to 40226/2013, E/40213, 40243 to 40247/2013 And E/40894 to 40911/2013 - Final Order Nos. 41546-41587 / 2015 - Dated:- 24-11-2015 - Shri R. Periasami, Technical Member And Shri P. K. Choudhary, Judicial Member For the Petitioner : Shri M. Kannan, Advocate For the Respondent : Shri B. Balamurugan, AC (AR) ORDER Per R. Periasami All the 42 appeals are taken up together for hearing and disposal as the issue involved is common relating to levy of interest under section 11AA of Central Excise Act. 2. The brief facts of the case that the appellants are engaged in the manufacture of fireworks and discharging central excise duty. The appellants collected the amount at the rate of 3% and 2% on the value of goods cleared towards charity and transit insurance and same were not included in the assessable value. The department initiated proceedings for demanding differential duty on the charity amount. The Tribunal vide Final Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the effect that the appellant will not seek further adjournment, is recorded. The Tribunal is at liberty to fix the date of hearing, preferably in the month of October 2015 and the appellant is willing to cooperate with the Tribunal, without seeking adjournment on the date so fixed. The Registry is directed to return the original records to the Tribunal forthwith for the disposal of the appeals. 5. Consequent upon the order of the Hon ble High Court, all the 12 appeals were restored and are taken up for denovo disposal and the remaining 30 appeals which are identical in nature pertaining to subsequent periods are also taken up for hearing and disposal. 6. Heard both sides and perused the record. 7. Learned counsel appearing for the appellants submitted a written submission dated 27.10.2015 and a paper book containing case laws and reiterated the same. He submits that they are contesting only the levy of interest as the valuation issue of inclusion of charity amount has already been settled by Tribunals order dated 10.5.2011. The department has finalized the duty amount and they have also paid the differential duty amount. He submits that the period involved in these a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He relied on the following case laws:- (a) Punjab Bearing Industries Ltd. v. Union of India - 2007 (207) E.L.T. A97 (S.C.) (b) Canara Bank - AIR 2001 SC 3095 (c) CCE, Pune Vs. SKF India Ltd. - 2009 (239) ELT 385 (SC) (d) Pratibha Processors Vs. Union of India - 1996 (88) ELT 12 (SC) (e) Alembic Ltd. Vs. CCE, Vadodara - 2013 (295) ELT 535 (Tri. LB) (f) Final Order No. 40677/2015 in the case of Tamilnadu Asbestos (Pipes) Ltd. Vs. CCE, Chennai 7. We have carefully considered the submissions of both sides. The short issue in these appeals relates to demand of interest for the differential duty determined on account of value addition of charity amount in the assessable value. The period involved in the present case relates to July 2000 to July 2010. As directed by the Honble High Court of Madras in their order dated 12.8.2015 to examine the issue of liability of interest during the relevant period, we have proceeded to dispose of the appeals. 8. On perusal of the records and the orders passed by both the authorities below, we find that the Department disputed valuation from the year 2000 onwards and show cause notices were issued for addition of charity amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in the case of CCE Vs. Bescom Products (Kar.). The same has been recorded by the Commissioner (Appeals) in their impugned orders. In this regard, we find that the demand was raised for inclusion of the charity amount so the differential duty is due from the date when it was liable to be paid and the Tribunals order has attained finality, whereas the demand of differential duty was raised by the department. This is not a case of voluntary payment but there was a notice issued demanding differential duty and therefore the demand was confirmed and after the Tribunal s order the duty was re-determined and the interest payable liability arises from the date duty becomes due. In this regard, it is relevant to state that the Tribunal in the case of Alembic Ltd. Vs. CCE, Vadodara (supra) clearly held that interest liability arises on the payment under the provisions of section 11AB even prior to 11.5.2011. The relevant paragraphs of the Tribunals Larger Bench decision is reproduced:- 6. The main plank of the argument of ld. counsel for the assessee is that sub-section 2 of Section 11AB which was brought into the Statute needs to be read as these provisions shall not apply t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said amendment has enlarged the scope of the coverage of recovery of interest to all cases wherein the demand has been confirmed by the authorities or has been voluntarily paid by an assessee. The amendment does not, in our considered view, wipe out the existing liability to pay interest in respect of cases involving fraud, collusion, any wilful mis-statement of facts with intent to evade payment of duty. In our view, the amended sub-section 2 of Section 11AB from 11-5-2001 only mandates that interest liability cannot be fastened under the amended Section 11AB prior to 11-5-2001. 8. This view is fortified by the judgment of the Honble High Court of Gujarat in the case of Exotic Associates (supra). In the said tax appeal, the substantial questions of law which were formulated by the court are usefully reproduced as under : 2. Tax Appeal No. 572 of 2007 is filed by the assessee. This appeal was admitted on 4-5-2007 and following substantial questions of law were formulated by the Court at the time of admission of the appeal :- A. Whether penalty was liable to be imposed on the assessee in case where part amount of duty had been deposited by the assessee before issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provisions of Section 11AB of Central Excise Act, 1944, and even prior to 11-5-2001. 13. The ratio of the above decision squarely applies to this case. Further, we find that the Hon ble Supreme Court in the case of CCE, Pune Vs. SKF India (supra) clearly discussed and settled the issue of the leviability of interest under section 11AA and 11AB. The relevant paragraph is reproduced below:- 9. Section 11A puts the cases of non-levy or short levy, non-payment or short payment or erroneous refund of duty in two categories. One in which the non-payment or short payment etc. of duty is for a reason other than deceit; the default is due to oversight or some mistake and it is not intentional. The second in which the non-payment or short payment etc. of duty is by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Act or of Rules made thereunder with intent to evade payment of duty ; that is to say, it is intentional, deliberate and/or by deceitful means. Naturally, the cases failing in the two groups lead to different consequences and are dealt with differently. Section 11A, however allow the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal for dismissing the Revenue s appeal took the view that there would be no application of Section 11A (2B) or Section 11AB where differential duty was paid by the assessee as soon as it came to learn about the upward revision of prices of goods sold earlier. In M/s. Rucha Engineering the High Court observed as follows: It is evident that the Section (11AB) comes into play if the duty paid/levied is short. Both, the Commissioner (Appeals) and the CESTAT have observed that the Assessee paid the duty on its own accord immediately when the revised rates became known to them from their customers. The differential duty was due at that time i.e. when the revised rates applicable with retrospective effect were learnt by the Assessee, which was much after the clearance of the goods and therefore, question of payment of interest does not arise as the duty was paid as soon as it was learnt that it was payable. Finding that provisions of Section 11A (2) and 11A (2B) were not applicable as the situation occurred in the instant, case was quite different, Section 11AB (1) was not at all applicable, and therefore, the Assessee was not required to pay interest. 13. It further held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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