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TMI Blog2008 (2) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... f Central Excise (Determination of Value of Excisable Goods) Rules, 2000; that during the period 2003-04, it was noticed by the department that the respondent paid the duty on the value by adding 10% to the cost of production in whole year which was in fact applicable only w.e.f. 5-8-2003; that during the period from 1-4-2003 to 4-8-2003, the assessable value of the goods should have been worked out @115% of the cost of products as per the prevailing Rules; that the above act of the respondent resulted in short payment of Central Excise duty amounting to Rs. 2,27,682/- during the period 1-4-2003 to 4-8-2003; that the respondent on persuasion by the department paid differential duty vide Cenvat E. No. 1024 dated 5-11-2004 and also paid interest subsequently; that basing on the above facts Show Cause Notice dated 30-5-2006 was issued to the respondent calling upon to show cause as to why (i) the said differential duty amounting to Rs. 2,27,682/- paid by them should not be confirmed and appropriated against the demand in terms of Section 11A of the Central Excise Act, 1944 (ii) interest should not be demanded and recovered under Section 11AB of the Central Excise Act, 1944 for late pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of fraud, collusion or any other mis-statement, suppression of facts or contravention of any of the provisions of the Act or the Rules made there under with intent to evade payment of duty has been established; (iii) that in this case though duty has been paid voluntarily by the respondent but it was paid only after it was pointed out by the department which could have otherwise escaped due to their suppression. They relied on the following case laws : (a) Zunzarrao Bhikaji Nagarkar v. UOI - 1999 (112) E.L.T. 772 (S.C.) = 1999 (32) RLT 125 (S.C.) (b) Pee Aar Steel v. CCE, Meerut [2004 (170) E.L.T. 406 (All.) (c) CCE, Indore v. Deepak Spinners [2005 (179) E.L.T. 93 (Tri.-Del.)]; (iv) that the Tribunal in its decision at 2004 (168) E.L.T. 466 in respect of M/s. Machino Montell (India) Ltd. has relied upon the decision in respect of Rashtriya Ispat Nigam Ltd., 2003 (161) E.L.T. 285 (Tribunal) and Shree Krishna Pipes Ltd. [2004 (165) E.L.T. 508 (Kar.)], respectively. An appeal of revenue against the decision of Hon'ble Karnataka High Court in respect of Shree Krishn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re issue of any Show Cause Notice; (v) that they also contested/opposed the payment of interest on such differential duty on account of the judgments of the Hon'ble Tribunal in the case of M/s. Kitply Indus v. CCE - 2003 (157) E.L.T. 110 (T) and M/s. Jai Yushin v. CCE - 2000 (119) E.L.T. 718 (T-LB) which has held that in case of stock transfer of goods on payment of duty the credit was available to the other unit, there was no sale and hence there was no question of any intent to evade the payment of duty. In the above case it was also held that where the duty had been paid, before the issue of Show Cause Notice, there was no question of payment of any interest or penalty; (vi) that however the respondent later on deposited the interest also; (vii) that reliance of the appellant in the case of CCE, Indore v. Deepak Spinners Ltd. is not correct because the facts of the case were totally different. In the respondent's case there was no clandestine removal, there was no evidence of any intentional breach of the law but there was a clerical error of loading 10% instead of 15% in the cost which was a bona fide mistake and was corrected immedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .L.T. 289 (S.C.-LB) (xi) that the appellant also urged for a penalty under Rule 25 of Central Excise Rules, 2002 in addition to penalty under Section 11AC which is patently incorrect, invalid and illegal in view of the law settled by the judgment in the case of FMC India Ltd v. CCE - 2006 (193) E.L.T. 57 (T). (xii) that the appellant's prayer that the respondent should be imposed penalty under Section 11AC as well as under Rule 25 amounts to re-adjudication of the case by the Hon'ble Commissioner (Appeals) for which he has no power or authority under the present law. 3. Personal hearing was held on 27-2-2008 wherein Shri J.L. Jakhotia, Consultant duly authorised by the respondent company appeared alongwith Shri T.N. Badole, Senior Excise Officer at 2.30 p.m. From the department side none was present. During the hearing the consultant reiterated the submissions made in the memorandum of cross objection. In addition to the above, he also filed a written submission alongwith the following case laws : (a) UOI v. TPL Industries Ltd. - 2007 (214) E.L.T. 506 (Raj.) (b) CCE, Ludhiana v. Sigma Steel Tubes - 2007 (21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 2007 (212) E.L.T. 62 (Tri.-Ahd.) (ii) Widia India Ltd v. CCE, Bangalore - 2007 (207) E.L.T. 562 (Tri.-Bang.) (iii) Nehru Steel v. CCE, Ghaziabad - 2007 (207) E.L.T. 129 (Tri.-Del.) (iv) Hemant N. Talekar v. CCE, Mangalore - 2007 (6) S.T.R. 378 (Tri.-Ban.) (v) U.P.State Yarn Co. Ltd. v. CCE, Kanpur - 2006 (206) E.L.T. 222 (Tri.-Del.) (vi) Nutrine Confectionery Co. (P) Ltd. v. CCE (A), Hyd - 2006 (205) E.L.T. 553 (Tri.-Mum.) (vii) Rashtriya Chemicals & Fertilizers Ltd. v. CCE, Mumbai - 2006 (202) E.L.T. 622 (Tri.-Mum.) (viii) Janatics India Pvt. Ltd. v. CCE, Coimbatore - 2006 (202) E.L.T. 302 (Tri.-Chennai) (ix) Indian Petrochemicals Corpn. Ltd. v. CCE, Vadodara - 2006 (198) E.L.T. 193 (Tri.-Mum.) (x) CCE, Vadodara v. Hemant Plastics & Chemicals Ltd. - 2006 (196) E.L.T. 177 (Tri.-Mum.) 4.1 The various benches of the Hon'ble Tribunal held in the above few noted decisions that when duty and interest were deposited before the issue of Show Cause Notice, penalty under Section 11AC is not imposable. At the same time, relying on the decision of Machino M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd interest, the respondent was under bona fide belief, in view of the decisions namely M/s. Kitply Industries v. CCE. and M/s. Jaiyushin v. CCE, they need not pay interest and penalty when the short payment was paid before the issue of Show Cause Notice. It is also contended by the respondent that the fact of stock transfer to the other units were reflected in the monthly returns from time to time and therefore the question of alleging fraud, mis-statement, suppression of fact etc cannot be invoked. Besides it is also on record that the short payment was occurred due to clerical, error i.e. instead of arriving at 115% they arrived at 110% and when the same was pointed out they paid the differential duty. These are the facts which cannot be challenged by the department. Therefore, every case has to be seen according to the situation which leads to less payment or short payment. In the present case the short payment occurred due to clerical mistake and the facts of the activities of the respondent were fully known to the department. This is the reason which led to the adjudicating authority to conclude that there was no intention on the part of the respondent to evade payment of dut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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