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TMI Blog2011 (10) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... of the demand which arising from 11/05/2001, interest liability accrue under Section 11AB and even in respect of demands arising prior to 11/05/2001 interest liability will accrue if the payments have been made on or after 11/05/2001. Thus, the demand for interest at the appropriate rates under Section 11AB is sustainable for the period from 11/05/2001 onwards - Levy of interest confirmed - levy of penalty u/s 11AC dropped. - E/287/2008 - - - Dated:- 13-10-2011 - Shri P.R. Chandrasekharan,J Appearance: Shri Vishal Agarwal, Advocate for the appellant Shri A.K. Prabhakar, Superintendent (A. R.) for the respondent Per: P.R. Chandrasekharan: This appeal being taken up for consideration in pursuance of the order of the Hon'ble High Court of Bombay in Central Excise Appeal No. 139/2009 dated 07/06/2011. 2. The facts arising for consideration are as follows: 2.1. The appellant, M/s. Ispat Industries Ltd., cleared certain inputs and capital goods on loan basis to their another unit, namely, M/s. Ispat Metallics Ltd. without payment of duty and without preparing Central Excise invoices during the period from 04/04/2000 to 06/08/2001. On this being pointed out, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the lower appellate authority who had not to given any specific finding on this point. Thereafter the lower appellate authority passed the order dated 14/01/2008 wherein he held as follows: "It was contended by the appellants before the CESTAT that they had contended before the Commissioner (Appeals) that the confirmation of demand by the adjudicating authority is not correct and the order-in-original is traveling beyond the show cause notice and the Commissioner (Appeals) has not given any finding on this point. It is clear from the records that this is not true. The show cause notice clearly stated that inputs/capital goods on which credit had been taken had been removed as such without reversal of credit during the period 04/04/2000 to 06/08/2001 and on being pointed out the appellants had reversed credit of Rs. 1,53,394/- on 15/01/2002. As already discussed this voluntary payment was never disputed by the appellants at any stage of the proceeding. It was submitted in the reply to the notice that there was no evidence that either credit had been taken or the inputs / capital goods had been removed as such so as to attract Rule 57F / 57AB / Rule 3(4). However, having p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en considered. The only observation that we find in the order of the Tribunal in this regard is as follows: "It is also noteworthy that the allegation of the department that the assessee had contravened various provisions of the rules with intent to evade payment of duty was not successfully contested by them. In the circumstances, the requirements of Section 11AC were met." 6 Ex-facie and with respect, the Tribunal has not addressed itself to the question as to whether the fundamental requirement of an intent to evade the payment of duty was duly established so as to attract the extended period of limitation. We have extracted from the reply filed by the assessee to the notice to show cause since it is evident that the defence of the assessee was that there was no intent to evade the payment of duty. Whether that was so or otherwise was a matter which ought to have been determined, but has not been determined by the Tribunal. In these circumstances, we are of the view that an order of remand would be warranted in the facts of this case. 7 We, accordingly, set aside the order of the Tribunal dated 29 May 2009. Appeal No. E287/2008 shall stand restored to the file of the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relies on the judgment of the Tribunal in the case of Reliance Industries Ltd. vs. Commissioner of Central Excise, Rajkot, wherein it was held that: "It is an established legal position that, where any duty payable by an assessee would be available as CENVAT credit to the recipient of the goods, such duty cannot be demanded from the former." 2.7. The appellant also relies on the judgment of the apex court in the case of Commissioner of Central Excise, Pune vs. Coca - Cola India Pvt. Ltd. 2007 (213) ELT 490 (S.C.) wherein it was held that in cases involving revenue neutrality, the entire question relating to demand and payment of duty becomes only academic and no purpose would be served by entertaining the appeals. As regards the demand for interest under Section 11AB, the appellants submits that the power to demand interest under Section 11AB in cases not involving suppression of facts or misstatement came into force only w.e.f. 11/05/2001 and, therefore demand for interest under the said Section would apply only w.e.f. 11/05/2001 whereas in the instant case demand pertains to the period by 04/04/2000 to 06/08/2001. The appellant also relies on the judgment of the Larger Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 11AC, it has to be first established that duty has been short-paid or short-levied or non-paid or non-levied and such short-levy or short-payment or non-levy or non-payment is on account of fraud, suppression of facts, collusion, willful mis-statement of facts or contravention of any of the Rules with an intent to evade payment of duty. When the show cause notice itself does not propose demand of duty, determination under Section 11A(2) does not arise, let alone a finding confirming the demand on the basis of elements mentioned above. Therefore, in the absence of determination of duty under Section 11A(2), the question of imposition of penalty under Section 11AC does not arise at all. Secondly, in the instant case whatever duty has been paid by the appellant would have been available as credit at the recipient unit. Therefore, the whole exercise was revenue neutral and the appellant did not stand to gain by suppressing any facts and this point has been contested by the appellant both before the lower adjudicating and appellate authorities and no finding has been given on this point by the lower authorities. Therefore, in the light of the judicial pronouncements relied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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