2010 (8) TMI 552 - AT - Central Excise

Demand - Differential duty - The decision of the Apex Court in Autolite (India) Ltd. v. CCE, Jaipur - 2003 (154) E.L.T. A169 (S.C.), relied upon by the Revenue in the appeal is distinguishable for the reason that, in that case, the credit was not available to the assessees themselves but to another assessee and it is in this context that Apex Court held that revenue neutrality situation did not arise - The fact that the assessments were also provisional is a further ground for holding that the assessees are not liable to pay interest or penalty - Appeal is dismissed

Summary

Issues:
- Appeal against levy of interest and imposition of penalty
- Differential duty paid by assessees available in another factory
- Intention to evade payment of duty
- Payment of duty before show-cause notice
- Availability of differential duty as credit
- Precedent of Autolite (India) Ltd. v. CCE, Jaipur
- Eligibility of assessees to take credit on differential duty
- Liability to pay interest in terms of Section 11AB
- Provisional assessments
- Rejection of appeal and cross-objection

Analysis:

The appeal before the Appellate Tribunal CESTAT, CHENNAI, involves challenging the order of the Commissioner (Appeals) regarding the levy of interest and penalty on the assessees. The Commissioner had set aside the imposition of penalty and interest, citing that the assessees had paid the differential duty, which was available to them in another factory, before the issuance of the show-cause notice. This act of payment was considered as evidence that there was no intention on the part of the assessees to evade duty payment, thus rendering them not liable for penalty and interest.

During the hearing, it was argued that the payment of duty before the show-cause notice should not absolve the assessees from penalty and interest. However, the availability of the differential duty as credit to the assessees themselves was deemed significant in determining their intention to evade duty payment. The Tribunal distinguished the present case from the Autolite (India) Ltd. v. CCE, Jaipur precedent, where the credit was not available to the assessees themselves but to another party. In the current scenario, the assessees were eligible to take credit for the paid differential duty, reinforcing the absence of any intent to evade duty payment.

Regarding the issue of interest, it was noted that the assessees were not liable to pay interest under Section 11AB(2) as the duty was payable before the enactment of the Finance Act, 2001. Additionally, the provisional nature of the assessments further supported the decision that the assessees were not obligated to pay interest or penalty. Consequently, the Tribunal upheld the order of the Commissioner, rejecting the appeal. The cross-objection, which was a response to the Revenue's appeal, was also dismissed by the Tribunal.