2012 (9) TMI 569 - HC - Central Excise

Wrongful availment of the credit - interest and penalty equivalent to the amount of duty under section 11AC - Tribunal could not have, on remand, reconsidered the issue relating the duty earlier as proceedings related to the reduction of penalty by this Court has restored - Held that - The assessee had paid the entire duty amounting to ₹ 17,96,685/- with interest amounting to ₹ 1,80,439/-. Moreover, with a view to put an end to the controversy relating to the modvat credit amounting to ₹ 58,915/- and ₹ 41,600/- which is remanded by the Tribunal, the assessee through its counsel agreed to forgo the amount of ₹ 4,50,000/- already deposited with the revenue. Thus, the duty demand confirmed at ₹ 17,96,685/- as per the original order of the Tribunal stands discharged on account of payment of the said amount with interest. Hence, the first question does not survive. Suppression of facts claiming depreciation on capital goods - Held that - realising the mistake, the assesee took steps to withdraw the claim of depreciation and since that did not materialise, the assessee offered to pay the duty with interest. In these circumstances, the decision of the Tribunal that Section 11AC is not attracted, cannot be faulted - against revenue.

Summary

Issues:
1. Tribunal's authority to reconsider duty demand despite specific remand on penalty issue.
2. Applicability of Section 11AC for duty suppression.
3. Allegation of perverse findings by the Tribunal.

Issue 1:
The High Court addressed the question of whether the Tribunal had the authority to reconsider the duty demand despite a specific remand on the penalty issue. The Court noted that confusion arose due to a clarificatory order, leading to the Tribunal confirming the duty demand at a reduced amount. The Revenue contended that the Tribunal exceeded its jurisdiction by reconsidering the duty issue. However, the Court observed that the duty amount was paid by the assessee, resolving the matter. Consequently, the first issue was deemed resolved as the duty demand stood discharged.

Issue 2:
Regarding the applicability of Section 11AC for duty suppression, the Tribunal found that the assessee's failure to claim depreciation on capital goods was a bona fide error without intent to evade duty. The assessee rectified the error by offering to pay the duty with interest upon realization. The Court upheld the Tribunal's decision that Section 11AC was not applicable in this context, considering the circumstances and the assessee's actions.

Issue 3:
The Court also addressed the allegation of perverse findings by the Tribunal. It noted that the Tribunal's decision on the duty demand and modvat credit was based on the assessee's actions and payments made to resolve the matter. As the entire revenue claim was discharged by the assessee's payments, the Court found no merit in challenging the Tribunal's findings as perverse. Consequently, the appeal was disposed of with no costs awarded.

In conclusion, the High Court's judgment clarified the Tribunal's authority, upheld the Tribunal's decision on Section 11AC applicability, and dismissed the allegation of perverse findings, ultimately resolving the matter based on the actions and payments made by the assessee.