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Commercial Engineers & Body Builders Co. Ltd. Versus Commissioner of Central Excise Bhopal

2016 (8) TMI 120 - CESTAT NEW DELHI

Levy of interest and penalty on differential duty - revenue neutral exercise - appellant to avoid litigation, paid the differential duty of ₹ 2.18 crores approx. and intimated the Revenue - it was contended that, the entire exercise is revenue neutral inasmuch as whatever duty was required to be paid by the appellant, was available as credit to their other unit located at Jabalpur unit. - Held that:- the issue i.e. liability of the present assessee to pay the duty, has not been adjudicated .....

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vocate for the Appellants Shri Y Agarwal, AR for the Respondent ORDER After hearing both sides for sometime, we find that the appellants are engaged in the body building of various chassis received from the customers. They have another unit located at Jabalpur which is also engaged in the same activity. Jabalpur unit is receiving chassis from Tata Motors for fabricating bodies on the same and after availing cenvat credit of duty paid on the chassis, was clearing the full vehicle on payment of du .....

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cleared the same to M/s. Tata Motors. At the time of clearance, the Jabalpur factory took credit of duty paid by the present assessee. 3. Revenue by entertaining a view that the present appellant located at Bhopal is the manufacturer of vehicle and as such, they should have cleared the vehicle on full value of the same including the value of the chassis, initiated proceedings against them by way of issuance of show cause notice dated 9.1.2008. It is seen that prior to issuance of show cause noti .....

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y was required to be paid by the appellant, was available as credit to their other unit located at Jabalpur unit. He further submits that inasmuch as Jabalpur unit has cleared the vehicle by paying the duty on the full value of the same which they were not required to pay and inasmuch as the present appellant has again paid the differential duty, there was no malafide on their part, thus not calling for imposition of any penalty. As regards interest, he draws our attention to the Tribunal s deci .....

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s to our notice Supreme Court decision in the case of SKF [2009 (239) ELT 385] wherein the interest liability was upheld in case of subsequent issue of suppliers invoices even though the amount was paid even before issuance of show cause notice. 6. After carefully considering the submissions made by both sides, we find that the appellant has paid the differential duty but their liability to pay the same is being challenged by the learned advocate by placing reliance on the Hon ble Supreme Court .....

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er, but he is an independent manufacturer. However, we note that fact remains that the said issue i.e. liability of the present assessee to pay the duty, has not been adjudicated by the lower authorities. The fact that the Jabalpur unit discharged the full duty liability is also required to be kept in mind while adjudging the assessee s duty liability, even though they have paid the same. We also note that in case the appellant is held to be manufacturer and thus liable to pay duty on full value .....

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e of Reliance Industries vs. CCE Rajkot [2013(292) ELT 378 (Tri-Ahmd), we find that the issue was the subject matter of dispute and difference of opinion emerged in the original Bench of the Tribunal in the case of Bayer ABS Ltd. vs Commissioner Udaipur [2012 (281) ELT 296 (Tri-Ahmd), while one Member of the Bench was of the view that it was a case of revenue neutrality, there should not be any interest liability inasmuch as the duty required to be paid by one unit was available as credit to the .....

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e. As per decision of the Tribunal in the case of Larsen and Toubro Ltd. reported as [2013 (32) STR 410 (Tri-Del)], the majority decisions are required to be considered as Larger Bench decision of the Tribunal i.e. binding on Division Bench of the Tribunal. As such, the said decision of the tribunal in the case of Bayer ABS Ltd. vs Commissioner(supra) is required to be considered as declaration of law by the Larger Bench. The advocate reliance on the Tribunal s decision in the case of Reliance I .....

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