2013 (10) TMI 890 - AT - Central Excise

Short payment of duty - Differential Duty - When the differential duty required to be paid is available as credit to the same appellant s own recipient unit, the interest on such differential value is required to be charged or not - Alleged that assessable value adopted by them it had not been worked out at 110% cost of the production duly certified by Cost Accountant - later differential duty deposited Held that - Following BAYER ABS LIMITED Versus COMMISSIONER OF CENTRAL EXCISE, VADODARA 2010 (9) TMI 904 - CESTAT,AHMEDABAD - Appellant is liable to discharge interest liability as ascertained by lower authorities - even where the duty is short paid by an assessee, is available as credit to the recipient unit of the same assessee, interest in terms of provisions of Section 11AB is required to be confirmed and interest is leviable. Waiver of Pre-deposit - The appellant cannot be said to have made out prima facie case for complete waiver - No financial difficulty has been pleaded - it would be appropriate if the appellant deposits the entire interest amount - the appellant directed to deposit an amount upon such submission there shall be waiver of pre-deposit and stay of recovery in respect of the penalty imposed on the appellant Partial stay granted.

Summary

Issues:
- Differential duty payment on inter-unit transfer of finished goods for captive use
- Applicability of CAS-4 method for cost of production calculation
- Demand for payment of short paid duty, interest, and penalty
- Comparison with previous tribunal orders for similar cases
- Interpretation of relevant legal provisions for interest payment waiver

Analysis:

1. The case involved the appellant, a manufacturer of Bulk Drugs, who transferred finished goods to their sister units for captive use. The valuation of these goods was done at 110% of the cost of production as per Rule 8 of Valuation Rules 2000. The appellant paid differential duty amounting to Rs. 16,24,715/- based on the cost of production calculated using the CAS-4 method. A show-cause notice was issued demanding the short paid duty, interest under Section 11AB, and penalty under Rule 25 of CEA.

2. The appellant's counsel argued that a previous tribunal order had directed the appellant to deposit 10% of the interest and granted a waiver for the balance of interest and penalty. The counsel requested a similar treatment in this case.

3. The respondent's submission highlighted a decision in the case of Bayer ABS Ltd., stating that interest payment is applicable as per the Supreme Court's decision in the case of Commissioner of Central Excise, Pune vs. SKF India Ltd. The respondent argued that the facts in the present case were similar to Bayer ABS Ltd., and therefore, the appellant had no prima facie case for complete waiver.

4. The tribunal, after considering the arguments, found that the decision in Bayer ABS Ltd. was applicable to the present case. It was noted that the appellant did not establish a prima facie case for complete waiver, especially considering the absence of financial difficulty. The tribunal directed the appellant to deposit the entire interest amount of Rs. 1,31,555/- within six weeks, with a waiver of pre-deposit and stay of recovery for the penalty imposed, subject to compliance by a specified date.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the tribunal's decision based on legal provisions and precedents cited during the proceedings.