C.C.E. Raipur vs Shri Pramod Kumar, Dr For The

[Arising out of Order-in-Original No. Commr/RPR/De-Novo/68/2006 dated 05.06.2006 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Raipur].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see 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 of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Venkateshwar Strips (P) Ltd. .Respondent

Vs.

C.C.E. Raipur .Appellants

Appearance:

Shri S. Khanna, Proxy Advocate for the Appellant

Shri Pramod Kumar, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

Date of Hearing: 10.07.2015

FINAL ORDER NO. 52240/2015-EX(DB)

Per Ashok Jindal:

The appellant is in appeal against the impugned order demanding interest and imposition of penalty on them.

2. The facts of the case are that the show cause notice was issued to the appellant for demanding the duty of Rs.11,50,792/-+Rs.6,14,667/- and for disallowance of the Cenvat Credit of Rs.12,57,438/- during the period 13.10.1997 to 16.02.1998 and for confiscation of HR Strips on the ground that the appellant is manufacturer of HR Strips of non-alloys steel and MS tubes. HR Strips manufactured by them were notified under section 3A of the Central Excise Act 1944 w.e.f. 01.08.1997. The appellant in their strip mill section manufactured HR Strip which were cleared by them for captively consumption and claim under notification no. 67/95-CE dated 16.03.1995 to their tube mill section where those tubes were used for manufacture of tubes. The Revenue is of the view that appellant is not entitled for exemption under notification 67/95 dated 16.03.1995 as amended by notification no. 59/97-CE. Therefore, as appellant has not paid Central Excise duty on HR Strips. Therefore, they are liable to pay duty on HR Strips and duty on MS tubes and pipes of Rs. 11,50,792/- which were cleared by irregularly utilizing Cenvat Credit account. The adjudication took place. Cenvat Credit was denied and duty demand was confirmed. Aggrieved from the said order appellant filed the appeal before this Tribunal and this Tribunal vide Final order No.413-414/2005-C dated 08.04.2005 remanded matter back to the Adjudicating authority observing that as per notification 58/97-CE dated 30.08.1997 the deemed credit of duty at the rate of 12% of the value of HR Strips is entitled for deemed credit to the manufacturer of tubes. Therefore, duty was sought to be re-determined and matter was remanded back to the Adjudicating Authority. In remand proceedings again duty paid by the appellant was adjusted wherein the appellant paid excess duty of Rs.17,640/- but demand of interest was confirmed and penalty equivalent to duty was also imposed. Aggrieved from the said order of demanding interest and imposition of penalty, the appellant is before us.

3. The Ld. Counsel for the appellant submits that as per section 3A for the period 1997-98 there was a duty demand of Rs.9,20,000/- and they are entitled for abatement for the period of closure of their factory to Rs.2,52,600/-. Therefore, the total duty payable by them was Rs.6,67,400/- and the Cenvat Credit utilized for clearance of MS Tube was Rs.6,31,036/- making a total demand of Rs.12,98,426/- but in direction of the order of this Tribunal the appellant were entitled to take deemed credit of Rs.7,09,817/- and they have paid a duty to Rs.6,06,249/-. Therefore, they have paid the excess duty of Rs.17,640/-. When these facts are on record the demand of interest and imposition of penalty is not sustainable. To support his contention he relied on the decision of Hans Steel Rolling Mills Vs. CCE Chandigarh-2011 (265) ELT 321 (SC) to say that time limit prescribed under section 11A of the Act is not applicable. He also submits that in the case of Shiv Surendra Steel Rolling Engg. Mills Vs. CCE Ludhiana-2014 (303) ELT 559 (Tri-Del) has held that the provisions of Rule 97ZP of Central Excise Rules 1944 were omitted without saving close. Therefore, for the period show cause notices were prior to 01.03.2001 and adjudication took place thereafter is not sustainable. Relying on the decision of Krishna Processors Vs. UOI-2012 (280) ELT 186 (Guj).

4. On the other hand, Ld. AR reiterated the findings of the impugned orders.

5. Heard the parties. Considered the submission.

6. The short issue before us is that whether in the facts and circumstances of the case demand of interest and imposition of penalty by the lower authorities are sustainable or not. In fact, for the period where duty is demanded the appellant were required to pay a sum of Rs.6,67,400/- whereas they are entitled for deemed credit during the period is Rs.7,09,817/-. Therefore, the appellant have entitled more credit than the payment of duty. Moreover, appellant has paid excess duty of Rs.17,640/- during the impugned period as per the calculations. In these circumstances, we hold that interest is not payable by the appellant. Further, in the absence of any mensrea on the part of the appellant penalty is not imposable which is evident that after allowing deemed credit to the appellants, appellant has paid duty in excess. Therefore, malafides were not proved against the appellant. In these circumstances, penalty is also not imposable.

7. With these observations we hold that demand of interest and penalty are not sustainable on the appellant. With these terms impugned order is set aside. Appeal is allowed with consequential relief if any.

(Dictated and pronounced in the open court)

(B. Ravichandran) (Ashok Jindal) Member (Technical) Member (Judicial)

Bhanu

2

E/3266/2006-EX(DB)