M/S National Fertilizers Ltd vs Cce, Ludhiana

[Arising out of the Order-in-Original No. 08/LDH/2008 dated 31/03/2008 passed by The Commissioner of Central Excise, Ludhiana.]

For Approval and signature :

Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, 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 would 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 :

Department Authorities?

M/s National Fertilizers Ltd. Appellant

Versus

CCE, Ludhiana Respondent

Appearance

Shri R. Krishnan, Advocate  for the appellant.

Shri R.K. Grover, Authorized Representative (DR)  for the Respondent.

CORAM: Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

Final Order No. 52243/2015 Dated : 13/07/2015

Per. Ashok Jindal :-

Appellant is in appeal against the impugned order wherein demand and interest has been confirmed against them during the intervened period when there duty liability has been re-quantified by the Adjudicating Authority. The facts of the case are that appellant are manufacturing furnace oil and HPS which are being used for manufacturing of fertilizer. They are procuring those under Chapter 10 Procedure without payment of duty/ concessional rate of duty. Initially duty demand was confirmed against the appellant for the period January 1997 to March 1998 and April 1998 to June 1999. The adjudication orders were passed. The appellant challenge those orders before this Tribunal on the ground that they are not required to pay duty of this FOI HPS. When the matters came up before this Tribunal, this Tribunal relying on the decision of Gujarat Narmada Valley Fertilizers Co. vs. CCE, Vadodara reported in 2001 (128) E.L.T. 13 (S.C.) held that appellant are required to pay duty on the amount but in both the cases this Tribunal sent matter back to the Adjudicating Authority for re-quantified the demand of duty as per Section 11A (2) of the Central Excise Act, 1944. In remand proceedings duties were re-quantified which were reduced as demanded in the show cause notice. The re-quantified duty was already paid by the appellant before re-quantification. Revenues is of the view that appellant is required to pay interest on the duty from the date of initial orders passed by the Adjudicating Authority till they have paid the actual duty, therefore, for the intervening period they are required to pay interest under Section 11AA of the Central Excise Act, 1944. The demand of interest was confirmed. Aggrieved from the said order appellant is before us.

2. Heard the parties. We have gone through the provisions of Section 11AA of the Central Excise Act, 1944 which is reproduced below :-

Interest on delayed payment of duty  [Subject to the provisions contained in Section 11AB, where a person] chargeable within duty determined under sub-Section (2) of Section 11A, fails to pay such duty within three months from the date of such determination, he shall pay, in addition to the duty, interest (at such rate not below eighteen percent and not exceeding thirty-six per cent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette], on such duty from the date immediately after the expiry of the said period of three months till the date of payment of such duty:

Provided that where a person chargeable with duty determined under sub-Section (2) of Section 11A before the date on which the Finance Bill, 1995 receives the assent of the President, fails to pay such duty within three months from such date, then, such person shall be liable to pay interest under this section from the date immediately after three months from such date, till the date of payment of such duty.

Explanation 1 : Where the duty determined to be payable is reduced by the Commissioner (Appeals), Appellate Tribunal or, as the case may be, the court, the date of such determination shall be the date on which an amount of duty is first determined to be payable.

Explanation 2 : Where the duty determined to be payable is increased or further increased by the Commissioner (Appeals), Appellate Tribunal or, as the case may be, the court, the date of such determination shall be, -

(a) for the amount of duty first determined to be payable, the date on which the duty is so determined;

(b) for the amount of increased duty, the date of order by which the increased amount of duty is first determined to be payable ;

(c) for the amount of further increase of duty, the date of order by which the duty is so further increased.

3. During the reading of the said provisions, interest is payable after three months from the date of final determination of duty payable by the assessee. Admittedly in this case duty has been paid by the appellant before their actual determination by the Adjudicating Authority as directed by the Tribunal in remand proceedings. Therefore, relying on the decision of AEONS CONSTRUCTION PRODUCTS LTD. VS. CCE, CHENNAI reported in 2007 (215) E.L.T. 464 (Tri.  Chennai), we hold that appellant are not required to pay interest for the intervening period from the date of initial assessment of duty till the re-quantification of the duty in the remand proceedings. Therefore, we set aside the impugned order and allow the appeal with consequential relief, if any.

(Dictated and pronounced in open court)

(Ashok Jindal)

Member (Judicial)

(B. Ravichandran)

Member (Technical)

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