Astec Lifesciences Ltd vs Commissioner Of Central Excise, Raigad

(Arising out of Order-in-Appeal No. US/94/RGD/2012 dated 15.2.2012 passed by Commissioner of Central Excise (Appeals), Mumbai-II)

For approval and signature:

Honble Mr. P.K. Jain, Member (Technical)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the :

CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

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Astec LifeSciences Ltd. Appellant Vs. Commissioner of Central Excise, Raigad Respondent

Appearance: Shri S. Drivedi, Advocate, for appellant Shri N.N. Prabhudesai, Superintendent (AR), for respondent

CORAM: Honble Mr. P.K. Jain, Member (Technical)

Date of Hearing: 17.7.2015 Date of Decision: 17.7.2015

ORDER NO

Brief facts of the case are that the appellant is a 100% EOU and clearing part of the goods in DTA. Two issues are involved. The First is the applicable basic excise duty rate and the second issue is relating to applicability of education cess and secondary and higher education cess third time.

2. Learned counsel for the appellant submits that as far as the first issue is concerned, they are not disputing and are admitting that it was a mistake on their part. He further submitted that initially the basic duty was 7.5% and they were paying duty on that basis. Later on, the duty rate got increased but the same did not come their notice and they continued to pay the duty on the basis of old rate. He further submitted that they are not disputing that this was a mistake on their part. However, the duty rate on which they were clearing the goods was very much indicated in their monthly return and the department never pointed out that the duty rate has changed and they should pay the correct rate of duty. He further submitted that there is no wilful misstatement anywhere or suppression of facts in the monthly return and under the circumstances, penalty under Section 11AC is not imposable. He undertakes to pay the interest on the delayed payment of differential duty.

2.1 As far as the second point is concerned, the learned counsel for the appellant submitted that this issue is now settled by the Larger Bench of this Tribunal in the case of Kumar Arch Tech Pvt. Ltd. vs. CCE, Jaipur-II reported in 2013 (02) LCX 0012. He submitted that in view of the Larger Bench decision, the issue is no more existing.

3. Learned AR reiterated the findings of the Commissioner (Appeals) in the impugned order and also submitted that the issue to be decided by the Tribunal is whether the education cess and secondary and higher education cess can be paid from the basic excise duty. He further submitted that in the very fact that the appellant has applied the incorrect rate of duty, penalty under Section 11AC is applicable.

4. I have considered the submissions made by both sides. On the first issue, I find that there is no dispute that the appellant has applied the incorrect rate of duty. However, it is the submission that they have been indicating the rate of duty applied by them in the monthly returns and the department never pointed out that the duty rate has gone up and so they are required to pay higher rate of duty and as soon as this was pointed out, they immediately paid the differential duty. Under the circumstances, there is no wilful misstatement on the part of the appellant. There is no suppression of fact and none of the ingredients to imposed penalty under Section 11AC are present in the case. Under the circumstances, penalty imposed under Section 11AC corresponding to the first issue is set aside.

4.1 As far as the second issue is concerned, I find that the issue is decided in appellants favour in the case of Kumar Arch Tech Pvt. Ltd. (supra) and in view of this position, the third time demand relating to education cess and secondary and higher education cess no more survives and the demand on this count is, therefore, set aside. Since the demand has been set aside, no penalty is imposable on this count. Further, the question whether the said amount can be debited from basic excise duty is no more relevant in the present facts of the case. I also note that the learned counsel for the appellant has undertaken to pay the interest on the delayed payment of duty.

5. In the result, the appeal is allowed.

(Pronounced in Court)

(P.K. Jain) Member (Technical)

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