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TMI Blog2014 (9) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale be treated as free sale sugar and not as levy sugar. The goods were cleared during November to December 97 and therefore, at the time of clearance of the goods, the goods were treated as free sale sugar and not as levy sugar. Further, vide letter dated 11/12/98, the appellant/assessee was paid differential amount of price between levy sugar and free sale sugar amounting to ₹ 46,17,427.26 and therefore, clearances of sugar was under free sale quota and therefore, the discharge of duty liability on such clearance under levy sugar quota was not in accordance with law. Similarly, interest was demanded under Section 11AB and penalty was sought to be imposed under Rule 173Q read with Section 11AC. Though, the Central Excise Rules, 1944 were substituted by Central Excise Rules, 2002, the provision for demand of duty short paid, not paid or erroneously refunded is Section 11A of Central Excise Act, which was in existence both in 1997 as well as in 2002. Similarly, the provisions for demand of interest invoking Section 11AB is also correct as the said provision was in existence both at the time of clearance a well as at the time of issue of show-cause notice. Therefore, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable to levy sale sugar @ ₹ 52/- per quintal. Subsequently, the sale was treated as sale from Free Sale Sugar vide Directorate of Sugar, New Delhi letter F. NO.1-5/97 SC-II dated 20/10/1997. Thereafter, the said Directorate vide letter No.8-45/98CC/34/3573 to 3579 dated 11/12/1998 paid the differential amount of price between levy sale sugar and free sale sugar amounting to ₹ 46,17,427.28 which was received by the appellant in January 1999. However, the assessee did not pay the differential duty of ₹ 5,17,473/- on the clearances of 15,681 quintals of sugar. Therefore, a show-cause notice was issued to the appellant vide notice dated 22/10/2002 demanding the differential duty of ₹ 5,17,473/- along with interest thereon and also proposing to impose penalties. The said notice was adjudicated upon and duty demands were confirmed along with interest and equivalent amount of penalty imposed. The said order was upheld at the first appellate stage. Aggrieved of the same, the appellant is before us. 4. The learned Counsel for the appellant submits that the entire demand is time barred as the show-cause notice has been issued on 22/10/2002 whereas the clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the sugar mills on production of payment of excise duty applicable for free sale sugar. Thus, the appellant was eligible for reimbursement of duty from Government. In spite of these correspondence, the fact of conversion of levy sugar to free sale sugar was never intimated to the department by the appellant and therefore, the extended period of time has been rightly invoked and consequently the confirmation of demand with interest along with equivalent amount of penalty under Section 11AC are sustainable in law. He relies on the decision of this Tribunal in UP State Sugar Cane Development Corporation Ltd., Vs. CCE, Allahabad 2009 (242) ELT 260 (Tri-Del) and Shree Satpuda Tapi Parisar SSK Ltd., Vs, CCE, Nasik 2013 (297) ELT 410 (Tri-Mumbai) wherein it was held that when levy sugar quota is converted into free sale sugar, subsequently the appellant is liable to discharge differential duty applicable to free sale sugar along with interest thereon. Accordingly, he pleads for upholding the impugned order. 6. We have carefully considered the submissions made by both the sides. 6.1 In the present case, the tariff as is stood at the relevant time read as follows:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough, the Central Excise Rules, 1944 were substituted by Central Excise Rules, 2002, the provision for demand of duty short paid, not paid or erroneously refunded is Section 11A of Central Excise Act, which was in existence both in 1997 as well as in 2002. Similarly, the provisions for demand of interest invoking Section 11AB is also correct as the said provision was in existence both at the time of clearance a well as at the time of issue of show-cause notice. Therefore, it is incorrect to say that the notice was issued under non-existent provision. Therefore, reliance placed by the appellant on the various case laws cited by him is clearly unsustainable in law. 6.3 The next contention is whether extended period of time could have been invoked in the present case. It is clear from the records that when the Directorate of Sugar converted the release from levy sugar into free sale quota, the said fact was never intimated to the department by the appellant. Further, even when the consideration was received for the clearances of sugar under free sale quota, the appellant did not inform the department of the receipt of enhanced consideration. Therefore, there was a suppression or wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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