2022 (5) TMI 747 - AT - Central Excise

Levy of interest and penalty - invocation of extended period of limitation - business of interior designing and furnishing - turnover of small scale exemption limit of Rs.30,00,000/- exceeded - manufacturing of various types of furniture without obtaining Central Excise registration - HELD THAT - As could be noticed from the order passed by this Tribunal in respect of the present Assessee-Appellant on dated 14.01.2009 2009 (1) TMI 935 - CESTAT MUMBAI , penalty and interest for the extended period was set aside by observing that learned Commissioner therein had correctly assessed that the liability of duty had occurred on point of law and there existed reasonable basis for doubt in discharge of duty liability - However, in the present appeals both invocation of extended period and imposition of penalty and interest are being confirmed by the Commissioner, even by distinguishing the order passed by the Hon'ble Supreme Court in Craft Interiors Pvt. Ltd. 2006 (10) TMI 2 - SUPREME COURT - We cannot do so nor would encourage such thin line distinction to bypass the judicial precedent set by the highest Court of this land. In the instant case, in view of the discussions, with the consent and concurrence of both the parties, instead of remanding it back, Rule 41 of the CESTAT (Procedure) Rule, 1982 should be invoked in, putting an end to the litigation that commenced way back in the early 1990 s only for the purpose of re-computation for the normal period when from the evidence on record it is quite evident that appellant had already paid Rs.3,50,000/- during investigation which is much higher than the entire demand raised for the normal period that would also meet the interest component. Appeal of the partly allowed on issue of limitation.

Summary

Issues involved:
Imposition of duty, interest, and penalty on the Appellant for exceeding the small scale exemption limit and manufacturing furniture without Central Excise registration.

Analysis:
The judgment concerns an appeal against the imposition of duty, interest, and penalty on the Appellant, engaged in the business of interior designing and furnishing. The Appellant had exceeded the turnover limit and was found manufacturing furniture without proper registration or payment of required duty. The dispute arose when a search operation revealed these violations, leading to a show-cause notice issued by the Commissioner covering the financial years from 1993-94 to 1997-98. The Appellant challenged the duty, interest, and penalty imposed, along with a penalty on its proprietor and confiscation of seized goods. The Respondent-Department also filed an appeal regarding the calculation error in the demand for the period 1994-95.

The Appellate Tribunal heard both appeals together. The Appellant argued that the legal issue had been settled by the Supreme Court in Craft Interiors Pvt. Ltd. Vs. CCE, Bangalore, stating that certain items like storage cabinets and kitchen counters erected at the site and not removable should not be considered as furniture. The Appellant also contended that despite requests, seized invoices were not provided to present a defense. The Respondent-Department supported the Commissioner's order but acknowledged the need for correcting a calculation error affecting interest and penalty.

After considering the submissions and case record, the Tribunal noted that in a previous order related to the Appellant, penalty and interest for the extended period were set aside due to doubt in the discharge of duty liability. However, in the present appeals, the Commissioner confirmed the extended period, penalty, and interest, even while distinguishing the Supreme Court's judgment. The Tribunal emphasized that such distinctions should not bypass judicial precedents. Instead of remanding the case, the Tribunal invoked Rule 41 to end the long-standing litigation and ordered a re-computation for the normal period, considering that the Appellant had already paid a significant amount during the investigation.

The Tribunal partly allowed the appeal on the issue of limitation, noting that the Appellant's prior payment exceeded the demand for the period within the limitation. The Departmental appeal was dismissed, and the Tribunal ruled that the Appellant's deposited amount could be adjusted against the demand within the limitation period, with no refund allowed for any excess amount.

In conclusion, the judgment addressed the legality of duty imposition, interest, and penalty on the Appellant for exceeding the small scale exemption limit and manufacturing furniture without proper registration, emphasizing the importance of following legal precedents and ensuring fair treatment in tax disputes.