2014 (2) TMI 966 - AT - Central Excise

Levy of interest - Deemed manufacture - refined oil - Period of dispute - Held that - in Finance Bill, 2005 refining was specifically brought into the scope of Chapter 15 - In the bill it was stated that the said note shall be effective from 1-3-86 and ending 28-2-2005 - Examination of the provision enacted by the 2005 Finance Bill shows that clearances of refined oil made by the appellant for the period 17-12-2004 to 12-1-2005 was dutiable which is claimed to have suffered duty on 2-3-2005. Till the position is made clear by Finance Bill, 2005, Assessees were not in a position to determine their liability - Therefore let the dispute come to an end without levy of interest as has been held by learned Commissioner (Appeals) - Decided against Revenue.

Summary

Issues Involved:
1. Interest liability on the appellant for confusion of law till Finance Bill, 2005.
2. Whether refined oil was dutiable for the period 17-12-2004 to 12-1-2005.
3. Interpretation of the deeming provision in the Finance Bill, 2005.
4. Determination of interest liability when duty element is not disputed.

Analysis:

Issue 1: Interest liability on the appellant for confusion of law till Finance Bill, 2005
The appellant was aggrieved by the order-in-appeal that held there shall not be interest liability on the appellant for the confusion of law till Finance Bill, 2005. The Revenue appealed this decision. The period under adjudication was 17-12-2004 to 12-1-2005, and duty on refined oil was discharged on 2-3-2005. The appellant claimed that no interest could be demanded for clearances made during the period in question.

Issue 2: Whether refined oil was dutiable for the period 17-12-2004 to 12-1-2005
The case referred to the decision of the Apex Court in Shyam Oil Cake Ltd. v. CCE, Jaipur, which stated that prior to March 1986, the process of manufacture of refined oil was not considered as manufacture. However, the Finance Bill, 2005 specifically brought refining into the scope of Chapter 15, making it clear that clearances of refined oil made by the appellant for the period in question were dutiable. The duty on refined oil was paid on 2-3-2005.

Issue 3: Interpretation of the deeming provision in the Finance Bill, 2005
The Finance Bill, 2005 introduced a deeming provision under Chapter 15, stating that the process of refining edible vegetable oils shall amount to 'manufacture.' This provision was effective from 1-3-86 to 28-2-2005. The Tribunal examined this provision to determine the dutiability of the refined oil cleared by the appellant during the relevant period.

Issue 4: Determination of interest liability when duty element is not disputed
The Tribunal's decision was confined to the interest aspect only when the duty element is not disputed. It was held that since the duty element was not in dispute, the dispute should come to an end without the levy of interest, as decided by the learned Commissioner (Appeals). Consequently, the Revenue's appeal was dismissed.

In conclusion, the Tribunal upheld the decision that there would be no interest liability on the appellant for the confusion of law till the Finance Bill, 2005, and dismissed the Revenue's appeal based on the dutiability of the refined oil and the interpretation of the deeming provision in the Finance Bill, 2005.