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2016 (5) TMI 1043 - CESTAT MUMBAI

2016 (5) TMI 1043 - CESTAT MUMBAI - TMI - Recovery of interest and imposition of penalty - Rule 25 and Section 11B respectively - Differential duty has already paid - Assessee have not followed the procedure of provisional assessment as laid down under Rule 7 of the Central Excise Rules, 2002 - No malafide intention as the assessee was discharging duty under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000. - Held that:- the assessable value of th .....

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t the assessee have been clearing the goods on payment of duty and they were supposed to pay the differential duty on the basis of the CAS4. The assessee have without contesting the duty liability, paid the duty which has been confirmed and appropriated in the adjudication order. The duty was confirmed under Section 11A of the Act. As per Section 11AB when the duty is determined under Section 11A interest is required to be paid consequently under Section 11AB. Therefore in the present case also .....

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0 & Appeal No. E/1969/2010 - A/86939-86942/16/SMB - Dated:- 3-2-2016 - SHRI RAMESH NAIR, MEMBER (JUDICIAL) For the Petitioner : Shri Prasad Paranjape, Advocate For the Respondent : Shri N.N. Prabhudesai, Supdt. (A.R) ORDER These appeals are disposed of by a common order as the issues raised in the appeals are same. 2. The two appeals were filed by the party against the impugned order by which interest was demanded and the appeal was filed on the ground that the case is revenue neutral and no int .....

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their own unit for which the valuation is governed by Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. According to which the value shall be 110% of the cost of production or manufacture of such goods. By arriving at the correct assessable value, the valuation is finalized only on the basis of Balance Sheet which can be determined only after closure of the financial year. It was alleged in the show cause notice that the assessee have not followed the pr .....

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3. Shri Prasad Paranjape, Ld. Counsel for the assessee in respect of their appeal for interest submits that the clearances were made to their own unit, therefore it is a case of revenue neutrality and in case of revenue neutral interest is not chargeable. He further submits that in the present case the demand is for extended period and for that reason also the interest in respect of duty for the extended period cannot be demanded. In support of his submission he placed reliance on the following .....

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05 (179) E.L.T 276 (S.C.). As regards Revenue s appeals seeking imposition of penalty he submits that there is no mala fide intention involved in the facts of the case as the assessee was discharging duty under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000, and obviously differential duty can be known only at a later stage after finalizing of Balance Sheet. Therefore it is not a case of clandestine removal or suppression of fact with intent to evad .....

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they have short paid the duty. For this act of non-compliance of Rule 7 of the Central Excise Rules and consequent short payment of duty, penalty is imposable. In support of the submissions on both the counts, he placed reliance on the following judgments: (i) Jay Yushin Ltd. Vs. Commissioner of C.Ex. New Delhi-2001 (137) E.L.T. 1098 (Tri.-Del.) (ii) Madurai Soft Drinks (P) Ltd. Vs. Collr. Of Central Excise, Madurai -1994 (74) E.L.T. 647(Tribunal) (iii) Star Industrial & Textile Enterprises .....

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Vs. Commr. of C.Ex. Mumbai-II-2009 (244) E.L.T. 557 (Tri.-Mumbai). 5. I have carefully considered the submissions made by both the sides. The issue to be decided is whether penalty under Rule 25 is imposable and interest under Section 11AB is recoverable on the assessee. I find that the assessable value of their goods is to be determined under Rule 8 of the Central Excise Valuation Rules, 2000, according to which the valuation has to be done on the basis of 110% of the cost of production and th .....

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ability, paid the duty which has been confirmed and appropriated in the adjudication order. The duty was confirmed under Section 11A of the Act. As per Section 11AB when the duty is determined under Section 11A interest is required to be paid consequently under Section 11AB. Therefore in the present case also the assessee is liable to pay the interest. In the appellant s own case as reported as Vidyut Metallics Pvt. Ltd. Vs. Commissioner of C.Ex. Mumbai-III 2009 (244) E.L.T. 557 (Tri.-Mumbai) th .....

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(2B) of section 11A provides that the assessee in default may, before the notice issued under sub-section (1) is served on him, make payment of the unpaid duty on the basis of his own ascertainment or as ascertained by a Central Excise Officer and inform the Central Excise Officer in writing about the payment made by him and in that event he would not be given the demand notice under sub-section (1). But Explanation 2 to the sub-section makes it expressly clear that such payment would not be exe .....

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addition to the duty, be liable to pay interest..... It is thus to be seen that unlike penalty that is attracted to the category of cases in which the non-payment of 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 , under the scheme of the four sections (11A, 11AA, 11AB & 11AC) interest is leviable on delayed or .....

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