M/S International Tobacco Co Ltd vs C.C.E. & S.T.-Ghaziabad

[Arising out of Order-In-Original No. 17/COMMR./GZB/2013-14 dated: 30.12.2013 passed by Commissioner of Central Excise, Ghaziabad]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Hon'ble Mr. Rakesh Kumar, Member (Technical)

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 International Tobacco Co Ltd. Appellant

Vs.

C.C.E. & S.T.-Ghaziabad Respondent

Appearance:

Mr. B.L. Narsimhan, Advocate for the Appellants

Mr. Govind Dixit & R.K. Grover, AR for the Respondent

CORAM:

Hon'ble Mr. Rakesh Kumar, Member (Technical)

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing /decision:21.01.2015

Final ORDER NO. 50191 /2015

Per Rakesh Kumar (for the Bench):

The appellant are manufacturers of Cigarette. In the budget of 2012-13 announced on 16.03.2012, the basic Excise duty on Cigarette of various lengths was increased by imposing an ad valorem component through clause 141 of the Finance Bill, 2012 read with 7th Schedule. This enhancement of the rate of duty on Cigarettes was accompanied by a declaration under Section 3 of the Provisional Collection of Taxes Act, 1931, (hereinafter referred to as PCT Act) and accordingly, the enhanced rates were effective from 17.03.2012. Subsequently, on 08.05.2012, the Government introduced an amendment to clause 141 of the Finance Bill 2012 by which the Ad valorem rate introduced with effect from 17.03.2012 was converted into specific rate and this had effect increasing the rate of duty on the Cigarette. However, this amendment was not accompanied by a declaration under section 3 of the PCT Act. The Finance Bill as amended, received the Presidents assent on 28.05.2012. The point of dispute is as to whether enhanced rate of duty as per the amendment introduced on 08.05.2012 would be applicable w.e.f. 17.03.2012. The appellant in this case, paid duty during the period from 17.03.2012 to 27.05.2012 at the rate announced in the budget on 16.03.2012 in terms of clause 141 of the Finance Bill 2012. The Department is of the view that during this period, the duty would be chargeable at the rate as per the amendment moved on as 08.05.2012. It is on this basis that the Commissioner vide order in original dated 30.12.2013 confirmed the duty demand of Rs. 10,23,61,298/- against the appellant along with interest thereon under section 11AB and imposed penalty of Rs. 50 lakh on them under Rule 25(1) of the Central Excise Rule, 2002. Against this order of the Commissioner, this appeal has been filed along with stay application.

2. The stay application was heard on 27.11.2014 and at that time the Tribunal in view of the Boards clarification dated 11.02.2014 on this issue granted unconditional stay and directed that since the issue is covered by the Boards Circular, the appeal, itself can be posted for final disposal on 16.01.2015. Accordingly, this matter was heard today for final disposal.

3. Shri B.L. Narsimhan, Advocate, the Ld. Counsel for the appellant, pleaded that the issue involved in this case, that is, whether the duty during the period from 17.03.2012 to 27.05.2012 is payable at the rates specified in the amendment to Finance Bill, 2012 made on 08.05.2012 or whether the duty is chargeable during this period only at the rate announced in the budget on 16.03.2012 in terms of clause 141 of the Finance Bill, 2012, that this issue now stands decided in favour of the appellant in view of the boards circular no. 981/5/2014-Cx dated 11.02.2014 wherein it has been clarified that since the amendment to the Finance Bill, 2012 moved on 08.05.2012 was not accompanied by declaration under section 3 of the PCT Act, the enhanced rate announced in terms of the amendment to the Finance Bill would be applicable only from 28.05.2012, and that the Tribunal in the case of Ultratech Cement Ltd. vs. CCE Bhojpur 2013 (288) ELT 438, wherein an identical issue was involved, has taken the same view and this judgment of the Tribunal has been upheld by Honble Calcutta High Court vide judgment dated 13.05.2014 (CEx No. 5/13).

3.1. Shri Narsimhan also pleaded that the above circular of the board has been followed by Tribunal in the case of ATC Ltd. vs CCE Chennai-III reported in 2014 VIL-(322) CESTAT-CHE-CE. He, therefore, pleaded that the impugned order is not sustainable.

4. Shri Govind Dixit and Shri R.K. Grover, the Ld. DRs, accept that the case is covered in favour of the appellant in view of the Boards Circular dated 11.02.2014 and also the judgment of the Tribunal in the case of MS ATC Ltd. vs CCE CHennnai-III (Supra) in which this circular has been followed.

5. We have considered the submissions from both the sides and perused the records. Since, both the sides agree that the issue involved in this case is covered in favour of the appellant by the Boards Circular No. 981/05 dated 11.02.2014, which has been followed by Tribunal in its judgment in the case of ATC ltd. vs CCE Chennai-III,(Supra) the impugned order is not sustainable. The same is set aside. The appeal is allowed.

(Dictated and pronounced in open court)

(Rakesh Kumar) (S.K. Mohanty)

Member(Technical) Member(Judicial)

Neha