2016 (4) TMI 321 - AT - Central Excise

Payment of interest of deposit - Section 11BB of the Central Excise Act, 1944 - Short payment on certain goods due to clandestine removal of finished goods - Same admitted, paid and included in total refund amount for month of August, 2009 under Notification No.32/99-CE dated 08.07.1999 - Revenue contended no appeal has been filed by the respondent against the order of clendestine removal of goods of adjudicating authority and also the interest on deposits was brought into the statute books as per Section 35FF of the Central Excise Act, 1944 in the year 2014, hence cannot be levied. Held that - Once no appeal against the adjudicating authority was filed by the Respondent, then it has to be interpreted that they have accepted the clandestine removal of the goods. Having accepted the fact, Respondent could not have raised the plea before the Lower Authorities that there was no clandestine removal of the goods. In this regard the observations made by the Apex Court in the case of Tractors and Farm Equipment Limited vs. Collector of Customs, Madras 1997 (2) TMI 111 - SUPREME COURT OF INDIA , are very relevant that a stand taken by an assessee during the earlier proceedings cannot be altered by that assessee subsequently. On the similar facts, the ratio laid down by the Apex Court is clearly applicable to the present proceedings. While allowing the appeal of the Respondent the First Appellate Authority went beyond the scope of the proceedings and directed payment of interest under section 11BB of the Central Excise Act, 1944 when the same was not the subject matter of the proceedings. - Decided in favour of revenue

Summary

Issues: Appeal against Order-in-Appeal setting aside duty confirmed on clandestine removal of goods and equivalent penalty, refund of amount paid by Respondent, interpretation of acceptance of duty liability, applicability of interest under section 11BB of the Central Excise Act, 1944.

Analysis:
1. The appeal was filed by the Revenue challenging the Order-in-Appeal dated 22.02.2013, which set aside the duty confirmed on clandestine removal of goods and the equivalent penalty imposed under section 11 AC of the Central Excise Act, 1944. The First Appellate Authority directed the department to refund the amount of ?1,82,971/- paid by the Respondent along with interest under section 11BB of the Central Excise Act, 1944. The Revenue argued that the Respondent had earlier accepted duty liability on clandestine removal of goods and cannot take a different stand later, citing the case law Tractors and Farm Equipment Limited vs. Collector of Customs, Madras [1997(91) E.L.T.254(S.C)].

2. During the hearing, no one appeared on behalf of the Respondent. The case records showed a similar absence on a previous occasion as well. The Adjudicating Authority had observed that 6078.460 kgs of Laminated Film were cleared without payment of duty, and the Respondent accepted the duty liability and paid the amount. A refund claim filed by the Respondent under notification No.32/99-CE was rejected by the Adjudicating Authority. The First Appellate Authority set aside the Order-in-Original and ordered the refund amount to be paid along with interest under section 11BB of the Central Excise Act, 1944. The Revenue contended that no interest of deposit is payable under 11BB as the interest on deposits was introduced in the statute books in 2014.

3. The department detected that the Respondent had short-paid ?1,50,199/- due to clandestine removal of finished goods, which was admitted and paid in August 2009. The same amount was included in a total refund filed by the Respondent under Notification No.32/99-CE. The Adjudicating Authority rejected the amount, and no appeal was filed by the Respondent. The Tribunal held that the Respondent's acceptance of the duty liability precluded them from denying clandestine removal later. The Appeal was allowed, setting aside the Order-in-Appeal and restoring the Order-in-Original.

In conclusion, the Tribunal allowed the Revenue's appeal, emphasizing the principle that a party cannot alter its stance on an issue once accepted. The judgment reinstated the duty liability and penalty imposed on the Respondent for clandestine removal of goods, overturning the Order-in-Appeal that directed a refund with interest.