2017 (12) TMI 1079 - AT - Central Excise

Tribunal rules in favor of appellant, no interest for delayed duty payment. Refund ordered within 30 days.

The Tribunal allowed the appeal, ruling that the appellant was not liable to pay interest for delayed duty payment under the CTUT Packing Machines Rules, ... Interest for delayed payment of duty - abatement under CTUT Packing Machines Rules, 2010 - machine deemed uninstalled/sealed - due date for payment upon addition/installation of packing machines - levy of interest under Section 11AAInterest for delayed payment of duty - machine deemed uninstalled/sealed - due date for payment upon addition/installation of packing machines - abatement under CTUT Packing Machines Rules, 2010 - levy of interest under Section 11AA - Liability to pay interest for alleged late payment of duty for June, 2015 when packing machine was uninstalled/closed from 1st June, 2015 to 19th June, 2015 and duty was paid on 24th June, 2015. - HELD THAT: - The Tribunal applied the precedent of Trimurti Fragrances Pvt. Ltd., which held that where a manufacturer intimates non-operation and the packing machine is sealed/treated as uninstalled, reinstallation during the month amounts to addition/installation of a machine and the differential duty, if any, becomes payable by the 5th day of the following month. Given the admitted fact that the packing machine was uninstalled/closed from 1st June to 19th June, 2015 and was reinstalled thereafter, the due date for any duty arising on account of addition/installation was the 5th of the next month. Payment on 24th June, 2015 therefore did not attract a delayed-payment interest under Section 11AA, and the appropriation of interest from the sanctioned refund was incorrect. The Tribunal accordingly directed refund of the deducted interest amount with interest as per rules and required the adjudicating authority to grant the refund within 30 days. [Paras 7]No interest is payable; appeal allowed and adjudicating authority directed to refund the deducted amount with interest and grant consequential relief.Final Conclusion: The appeal is allowed: on the admitted facts that the packing machine was uninstalled/closed from 1st June to 19th June, 2015, payment on 24th June, 2015 is not a delayed payment attracting interest; the Assistant Commissioner's appropriation of interest is set aside and refund (with interest) is directed to be issued within 30 days. Issues involved:Whether appellant is liable to pay interest for alleged late payment of duty under CTUT Packing Machines Rules, 2010.Analysis:The appellant filed an abatement claim before the Assistant Commissioner, stating that their packing machine was not used for the production of finished goods for 19 days in June 2015. The Assistant Commissioner granted abatement for the said period but also held the appellant liable to pay interest for delayed duty payment. The appellant contested this decision before the Commissioner (Appeals), arguing against the reduction of abatement and the imposition of interest. However, the Commissioner (Appeals) upheld the Assistant Commissioner's order.In the appeal before the Tribunal, the appellant relied on a previous ruling in the case of Trimurti Fragrances Pvt. Ltd. where a similar issue was decided in their favor. The Tribunal noted that the issue in the present case was covered by the precedent ruling and held that the appellant was not liable to pay interest for depositing duty on 24/06/2015. The Tribunal emphasized that since the machine was uninstalled/closed from 1st June, 2015 to 19th June, 2015, the duty payment date was considered as the 5th of the next month. The Tribunal directed the Assistant Commissioner to grant the refund along with interest within 30 days from the date of the order.Therefore, the Tribunal allowed the appeal, providing consequential benefits to the appellant in accordance with the law. The judgment clarified the application of CTUT Packing Machines Rules, 2010 in determining duty payment dates and interest liabilities in cases where machines are uninstalled or closed for a specific period, aligning with the principles established in previous rulings.