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TMI Blog2023 (6) TMI 1102X X X X Extracts X X X X X X X X Extracts X X X X ..... atutory interest. Surely, this was not the intention of the Legislature while sub-section (2B) was introduced in Section 11A of the Act. As it is already held that as the appellant was not liable to pay duty in terms of Rule 8 of Central Excise Valuation Rules, 2000, therefore, no interest is payable by the appellant in view of the decision of the Hon ble High Court in the case of CCE C, Vadodara-II v. Gujarat Narmada Fertilizers Co.Ltd. CENVAT Credit - revenue neutrality - HELD THAT:- It is the revenue neutral situation, no duty is payable by the appellant therefore whatever duty paid by the appellant Cenvat credit of the same has been availed by the sister unit, question of payment of interest does not arise. Therefore, the impugned order is set aside and the appeal is allowed with consequential relief. - Excise Appeal Nos. 552, 853, 854, 976 of 2011 AND Excise Appeal Nos. 289, 290, 291, 292, 293, 542, 543 & 545 of 2012 - FINAL ORDER NO. 75779-75790/2023 - Dated:- 22-6-2023 - HON BLE SHRI ASHOK JINDAL , MEMBER ( JUDICIAL ) And HON BLE SHRI K. ANPAZHAKAN , MEMBER ( TECHNICAL ) Shri A. K. Prasad , Advocate for the Appellant (s) Shri S. Mukhopadhyay , A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost of raw materials and also because there were no sales of the same goods to independent buyers at the factory gate. This differential duty was paid by the appellant even before issuance of show cause notice. But no interest was paid. 4. The Revenue is of the view that in all the cases where either supplementary invoices has been issued or payment of duty has been paid with a delay on their stock transfers, the appellant is liable to pay interest on the said differential duty for the intervening period. During the whole period total 12 show cause notices were issued to the appellant for demand of interest for the intervening period. Although in reply to the show cause notices the appellant contested even payment of duty, but the demand of interest was confirmed and penalties were also imposed. Against the said orders, the appellant is in appeals. 5. For better appreciation of the facts and details of the appeals, a chart is prepared which is as under:- Sl. No Unit SCN No. Date O.I.O No. Date O.I.A No. Date Appeal No. before CESTAT Period involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 64 /- Pig Iron 4 7 III 40/ JC/BOL/10 dt. 18 94/JC/Bol/1 0 Dt.08.10.20 10 OIA 89/BOL/201 1 Dt. 13.07.11 Appeal no. E/853/201 2 April 09 to Sep 09 21,03,511 Not quantified Pig Iron,M S Billets,Ferro waste and scrap Alloy Billet 4 8. III 13/2010-11 dt.01.11.10 05/AC- 05/JBIL/R- 4/DGP- II/11-12 Dt.21.06.20 11 OIA No.50/ Bol/2012 Dt.24.02.12 Appeal No.E/290/ 2012 Oct 09 to Dec 09 77,235/- Not quantified Pig Iron, MS Billet Alloy Billet 4 9. III 43/ADC/BOL/1 0 dt.03.12.10 107/ADC/Bol /11 Dt.13.07.20 11 OIA No.48/Bol/2 012 Dt.24.02.12 Appeal No.E/292/ 2012 Jan 10 to March 1 0 8,61,673/- Not quantified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant cannot now be compelled to accept the situation which was legally incorrect. If the system adopted by the Appellants either on their own volition or on insistence by the department was not legal, department cannot compel the appellant to perpetuate the illegality. In regard to whatever duty was to be paid by the appellant, the same is entitled to Cenvat Credit to appellant themselves. In that circumstances, the whole exercise was revenue neutral therefore the appellant is not liable to pay interest. 7. With regard to Appeals mentioned at Sl.No.2-12, it is the contention of the appellant that although differential duty was paid with a delay, but the same was entitled to Cenvat Credit to their sister unit as it is a revenue neutral situation as held by the Larger Bench of this Tribunal in the case of Jay Yuhshin Ltd. v. CCE, New Delhi [2000 (119) ELT 718 (Tribunal-LB)] therefore duty is payable by the appellant in case of revenue neutral situation, so question of payment of interest does not arise. 8. He further submits that demands are time barred as there was no misstatement or suppression of facts on the part of the appellant, therefore, extended period cannot be invoke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not have been possible. In that view of the matter, we do not find the case would fall under sub-section (2B) of Section 11A of the Act. Sub-section (2B) of Section 11A of the Act applies in a case where there is voluntary payment of unpaid duty before issuance of show cause notice under sub-section (1) of Section 11A. When the provision refers to show cause notice, it means a show cause notice which could have been validly issued and surely not a notice which had become time-barred. If by efflux of time and in absence of availability of extended period of limitation, such show cause notice itself had become time-barred, any payment made voluntarily by the manufacturer cannot be viewed as one made under sub-section (2B) of Section 11A of the Act. XXXXXXXXXXXXX 13. Accepting the stand of the Department that even in such a case once the payment of duty is made, interest liability would follow would bring about an incongruent situation. The recovery of the unpaid or short paid duty would become time-barred. If the manufacturer does not pay it voluntarily, it would not be possible for the Department to recover the same. But if he does it voluntarily despite completion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailing benefit of the Modvat Credit, hence the entire exercise is revenue neutral. Although the appellant paid differential duty later on, but same was available as Cenvat Credit to their sister unit is a revenue neutral situation, if appellant would have not paid differential duty that was not payable in terms of the above cited decisions. Therefore, as duty was not payable, the payment of interest does not arise in the case of revenue neutral situation. Further the case law relied upon by the Ld.AR for the department in the case of Indoworth (India) Ltd. (supra), is not applicable to the facts of the present case as in that case the appellant sought refund of interest paid on Service Tax which was not payable by the assessee. 16. In view of the above discussion, we hold that it is the revenue neutral situation, no duty is payable by the appellant therefore whatever duty paid by the appellant Cenvat credit of the same has been availed by the sister unit, question of payment of interest does not arise. In view of the above discussion, the appeals mentioned at Sl.No.2-12 are also allowed by setting aside the impugned orders. In the result, all the appeals are allowed with c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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