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2012 (10) TMI 6 - AT - Central ExciseApplicability of enhanced rate of duty as amended in the manner specified in the Seventh Schedule of the Finance Act, 2008 coming into force with immediate effect after passing of the Bill on 29.04.2008 or on date of enactment as on 10.05.08 - appellant engaged in the manufacture of Portland Pozzolana Cement falling under sub-heading 25232930 of the First Schedule to the Central Excise Tariff Act, 1985 - demand raised arising out of the substitution of tariff rate of Rs.900/- per ton in place of Rs.600/- per ton for the intervening period from 29.04.2008 to 09.05.2008 - Held that - Section 3 of the PCTA empowers the Government, where a Bill to be introduced on its behalf provides for imposition or increase of a duty of customs or excise , to insert in the Bill a declaration that any provision of the Bill relating to such imposition or increase shall have immediate effect under the Act. Undisputedly, no declaration under PCTA was made with regard to enhancement of duty on cement to Rs.900/- PMT, which was moved by way of amendment to Finance Bill, 2008 by the Finance Minister on 29.04.2008. Therefore, the effective date of the enhancement in the present case would be the date of enactment i.e.10.05.2008. It therefore follows that any proposal for imposition/increase of duty by way of an amendment will not have immediate effect in absence of declaration under the provisions of the PCTA. Order of commissioner set aside - Decided against Revenue
Issues:
1. Interpretation of provisions of the Finance Bill, 2008 regarding the increase in Central Excise Duty on cement. 2. Application of the Provisional Collection of Taxes Act, 1931 in the context of the Finance Bill, 2008. 3. Invocation of penalty under Section 11AC of the Central Excise Act, 1944. Analysis: 1. The case involved a dispute over the increase in Central Excise Duty on cement from Rs.600 per MT to Rs.900 per ton, as per the Finance Bill, 2008. The Department contended that the enhanced rate should be applicable from 29.04.2008 itself, based on the substitution in the 7th Schedule of the Finance Bill. However, the Appellant argued that since cement was not included in the 7th Schedule at the introduction of the Bill, there was no proposal for an increase in duty on cement. The Tribunal found that no declaration under the Provisional Collection of Taxes Act was made specifically for the amendment related to the increase in duty on cement. Therefore, the effective date of the enhancement was deemed to be the date of enactment, i.e., 10.05.2008, leading to the setting aside of the Commissioner's order in favor of the Appellant. 2. The Tribunal analyzed the provisions of the Provisional Collection of Taxes Act, 1931 in the context of the Finance Bill, 2008. It was highlighted that the Act empowers the Government to insert a declaration in the Bill for immediate effect of any provision relating to the imposition or increase of duty. In this case, as no declaration was made regarding the enhancement of duty on cement to Rs.900 per ton, which was introduced as an amendment to the Finance Bill, the Tribunal concluded that the amendment did not have immediate effect and was effective only upon enactment. Citing precedents, the Tribunal emphasized the necessity of a declaration under the Act for any proposed imposition or increase of duty to have immediate effect. 3. The Appellant also contested the imposition of penalty under Section 11AC of the Central Excise Act, 1944. They argued that since no allegations of fraud or willful misstatement were made against them, the penalty under this section could not be applied. The Tribunal agreed with this contention and further noted that the penalty under Rule 25(1)(a) of the Central Excise Rules, 2002 is subject to the provisions of Section 11AC. As a result, since the penalty under Section 11AC was not applicable, the penalty under Rule 25(1)(a) could not be imposed. The Tribunal referred to relevant judgments to support this interpretation and ruled in favor of the Appellant, setting aside the penalty imposed by the Commissioner.
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