2009 (8) TMI 980 - AT - Central Excise

Summary

Issues involved: Confirmation of duty against the appellant for transit losses exceeding condonable limit, challenge to interest amount confirmed under Section 11AB of Central Excise Act, 1944 for late payment of differential duty on re-warehoused goods.

Confirmation of duty: M/s. I.O.C.L. confirmed duty against the appellant for transit losses exceeding the condonable limit of 1%. The learned Advocate for the appellant did not contest the confirmation of duty.

Challenge to interest amount: The challenge was to the interest amount of Rs. 31,73,215/- and Rs. 3,26,786/- confirmed under Section 11AB of the Central Excise Act, 1944, for late payment of differential duty on re-warehoused goods.

Provisions of Rule 20: The Advocate for the appellant drew attention to Rule 20 of the Central Excise Rules, 2001, which provides for warehousing provisions. He highlighted that the benefit of removal of excisable goods from one warehouse to another without payment of duty is subject to conditions specified by the Board, including interest.

Board Circular No. 579/16/2001-CX: The Advocate referred to this circular issued under Rule 20(2) of the Central Excise Rules, 2001, emphasizing that failure to receive a warehousing certificate would only cause duty liability on the consignee, as outlined in the circular.

Interest confirmation under Section 11AB: The Advocate argued that since there was no circular specifying any interest rate as required by Rule 20(2), the interest cannot be confirmed against the appellant under Section 11AB. He contended that the rule is a complete code providing for warehousing facilities subject to conditions specified by the Board.

Decision: While acknowledging the merit in the Advocate's contention, the Tribunal noted that the issue was not raised before the Commissioner. Therefore, the matter was remanded to the Commissioner to adjudicate the appellant's liability to interest, considering the overall provisions of the law. The demand for duty was confirmed as uncontested, and the appellant was granted the opportunity to present their case.

Conclusion: The appeal was disposed of in the above manner, with the Tribunal directing the Commissioner to address the appellant's plea regarding interest liability after considering all relevant legal provisions.