TMI Blog2018 (7) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... 44. Whether the appellant has willfully done certain proactive acts which can lead to the invocation of elements such as fraud, collusion, willful misstatement or suppression of facts under Section 11AC? - Held that:- The appellant was not in a situation of control in this case and revision of prices of his manufactured product, squarely depended on M/s F.I.P.L. providing the correct value of their F.O.C. components. As soon as the appellant came to know that the value of F.O.C. products has been revised on higher side for past years by M/s F.I.P.L. the appellant has immediately deposited the excise duty short paid alongwith interest. The short payment of Central Excise duty on account of re-revised prices of F.O.C. products was neither deliberate nor with any malafide intentions and it was because of the facts that the circumstances of the matter were beyond the control of the appellant and therefore in our opinion though Central Excise duty is certainly leviable on the revised value of the appellants products supplied to M/s F.I.P.L. but the case is certainly not made out for levy of penalty under Section 11AC of Central Excise Act, 1944. The Central Excise duty short pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the above-mentioned amount of central excise duty alongwith interest deposited by them and the show cause notice also proposed to impose a penalty under Section 11AC of Central Excise Act, 1944. The show cause notice came to be adjudicated by the Adjudicating Authority on 31st December, 2015, where-under the above-mentioned amount of central excise duty alongwith interest was confirmed and as same had already been deposited by the appellant with the department. This amount deposited towards Central Excise duty and interest was appropriated towards confirmed duty amount and interest and in addition, a penalty of ₹ 11,73,19,961/- was also imposed under Section 11AC of Central Excise Act, 1944. The appellant are before this Tribunal against the above-mentioned order-in-original. 3. We have heard both the sides and have also perused the record of the appeal and written submissions made by the learned Counsel appearing for the appellant. 4. At the outset it is to mention that the learned Counsel appearing for the appellant has mentioned and emphasized that he is not challenging the demand of Central Excise duty and confirmation of same in the order-in-original, it is ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of F.O.C. raw materials was the basis for determination of assessable value of the manufactured products for payment of central excise duty. It was the responsibility of the appellant to revise the price of his manufactured products as soon as they came to know of revision of value of the F.O.C. raw materials. With above background it is before us to determine whether the element of fraud, collusion; or any willful misstatement or suppression of facts are present in this case which can justify rightful invocation of extended period of demand and more importantly the imposition of penalty under Section 11AC of Central Excise Act, 1944. 8. It is seen that Hon ble Supreme Court in its various pronouncements has held that only non-payment of Central Excise Duty because of certain innocuous omissions cannot be compared with collusion or willful misstatement or suppression of facts etc. as provided under Section 11A of Central Excise Act, 1944. We refer to Hon ble Supreme Court s judgment in case of M/s Uniworth Textiles vs. CCE, Raipur 2013 TIOL 13 SC CUS (not quoted/relied by the appellant) in this regard. 9. In view of above decision of the Hon ble Supreme Court, we a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant was not in a situation of control in this case and revision of prices of his manufactured product, squarely depended on M/s F.I.P.L. providing the correct value of their F.O.C. components. As soon as the appellant came to know that the value of F.O.C. products has been revised on higher side for past years by M/s F.I.P.L. the appellant has immediately deposited the excise duty short paid alongwith interest. 12. With above facts we reach to the conclusion that short payment of Central Excise duty on account of re-revised prices of F.O.C. products was neither deliberate nor with any malafide intentions and it was because of the facts that the circumstances of the matter were beyond the control of the appellant and therefore in our opinion though Central Excise duty is certainly leviable on the revised value of the appellants products supplied to M/s F.I.P.L. but the case is certainly not made out for levy of penalty under Section 11AC of Central Excise Act, 1944 while forming this opinion we also take shelter of Hon ble Supreme Court decision in case of M/s Uniworth Textiles Ltd. vs. CCE (supra) wherein it has been held that mere non-payment of duties is not equivalent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly refunded, the person who has paid the duty under sub-section (2B) of Section 11A, shall, in 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 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 , under the scheme of the four Sections (11A, 11AA, 11AB 11AC) interest is leviable on delayed or deferred payment of duty for whatever reasons. 11. The payment of differential duty by the assessee at the time of issuance of supplementary invoices to the customers demanding the balance of the revised prices clearly falls under the provision of sub-section (2B) of Section 11A of the Act. . 14. We are unable to subscribe to the view taken by the High Court. It is to be noted that: the assessee was able to demand from its customers the balance of the higher prices by virtue of retrospective revision of the prices. It, therefore, follows that at the time of sale the goods carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. What does differential price signify? It signifies that value, which is the function of the price, on the date of removal/clearance of the goods was not correct. That, it was understated. Therefore, the price indicated by the supplementary invoice is directly relatable to the value of the goods on the date of clearance, hence, enhanced duty. This enhanced duty is on the corrected value of the goods on the date of removal. When the differential duty is paid after the date of clearance, it indicates short-payment/short-levy on the date of removal, hence, interest which is for loss of revenue, becomes leviable under Section 11AB of the Act. In our view, with the entire change in the Scheme of recovery of duty under the Act, particularly after insertion of Act 14 of 2001 and Act 32 of 2003, the judgment of this Court in the case of M.R.F. Limited [supra] would not apply. That judgment was on interpretation of Section 11B of the Act, which concerns claim for refund of duty by the assessee. That judgment was in the context of the price list approved on 14th May, 1983. In that case, assessee had made a claim for refund of excise duty on the differential between the price on the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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