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2019 (6) TMI 8 - AT - Central ExciseMonetary amount involved in the appeal - demand of Interest - HELD THAT - I have to agree with the contentions of the Learned Consultant as to the appeal being hit by the National Litigation Policy. Admittedly, there is no demand of any duty in the case on hand, 2nd proviso to Rule 9 mandates payments of duty and fail to do so in full or partly attracts interest under Section 11AB on the balance amount outstanding for the defaulted period. Discernibly, there is no such balance amount outstanding or even a part thereof, to be paid, which only points out that there is no default. Thus, when there is no charge of duty in the first place, independent charge of interest cannot sustain. Hence, there cannot be any substantial question of law. The interest demanded originally and dropped thereafter vide Order-in-Original, is ₹ 14,44,026/- which is below the threshold limit for filing Revenue s appeal as per the National Litigation Policy - appeal dismissed being not maintainable.
Issues:
- Maintainability of the appeal under the National Litigation Policy - Dropping of interest under 3rd proviso to Rule 9 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - Applicability of abatement under Rule 10 in case of no production due to seizure/sealing of machinery Analysis: Issue 1: Maintainability of the appeal under the National Litigation Policy The Revenue filed an appeal against the Order-in-Original passed by the Commissioner of Central Tax, Bangalore. The appeal questioned the dropping of proceedings initiated by the Commissioner. The Learned AR argued that the issue involved a substantial question of law covered under Paragraph 4 of the Board Circular dated 11.07.2018, making it an exception to the monetary limits and the National Litigation Policy. However, the Learned Consultant for the respondent contended that the appeal was not maintainable due to the National Litigation Policy. The Tribunal agreed with the respondent, stating that there was no demand for duty, and therefore, no default existed. As there was no charge of duty, the independent charge of interest could not be sustained, leading to the dismissal of the appeal without delving into the merits. Issue 2: Dropping of interest under 3rd proviso to Rule 9 The Learned AR argued that the adjudicating authority erred in dropping the interest under the 3rd proviso to Rule 9 of the Pan Masala Packing Machines Rules, 2008, due to a delay in remittance of duty. He cited a decision of the Hon’ble High Court of Delhi to support his contention. However, the Tribunal found that since there was no outstanding balance amount to be paid, there was no default in duty payment. Consequently, the interest calculated at 18% on the alleged duty was deemed unnecessary, as there was no charge of duty in the first place. Issue 3: Applicability of abatement under Rule 10 The appeal also raised the issue of abatement under Rule 10 in cases where no production occurs due to the seizure or sealing of machinery. The Learned AR referred to previous decisions to support his argument that duty payment was not required when the seal was broken after the duty payment date. The Tribunal, however, emphasized that in the absence of any outstanding balance amount to be paid, there was no liability for consequential interest. As there was no delayed payment of duty, the interest calculated at 18% was considered baseless. In conclusion, the appeal was dismissed based on the non-maintainability under the National Litigation Policy, as there was no demand for duty and hence no default in payment, leading to the rejection of the interest claimed by the Revenue.
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