2018 (9) TMI 261 - HC - Service Tax

High Court defers complex excise duty issue, grants appellant relief pending larger Bench decision.

The High Court deferred to a larger Bench for resolution of the complex legal issue regarding excise duty payments and interest liability. The appellant ... Liability of Interest - short payment and belated payment of such duty - Held that:- The issue is still pending before the larger Bench and is yet to be considered by the larger Bench - In the interregnum the appellant has already paid the duty and interest demanded by the department-respondent. The appeal could be disposed of by reserving liberty to the appellant to approach the department for appropriate relief including refund after the consideration and disposal of the issue by the larger Bench - appeal disposed off. Issues involved:1. Dispute over excise duty payment and interest liability.2. Interpretation of legal precedents by the Appellate Tribunal.3. Pending issue before a larger Bench regarding excise duty rulings.4. Appellant's right to seek refund after resolution by the larger Bench.Analysis:Issue 1: Dispute over excise duty payment and interest liabilityThe appellant entered into an agreement with a steel company for the supply of industrial gases. Due to the steel company's failure to obtain tax exemptions as promised, the appellant suffered a tax component loss. The department issued a show cause notice for interest liability on short and belated excise duty payments. However, the notice was dropped as the appellant had already paid the dues. The department appealed against this decision, leading to a revision by the Appellate Tribunal, which relied on a legal precedent set by the Hon'ble Apex Court in the case of CCE, Pune v/s. SKF India Ltd.Issue 2: Interpretation of legal precedents by the Appellate TribunalThe appellant cited a ruling by the Hon'ble Apex Court in the case of Steel Authority of India Limited v/s. Commissioner of Central Excise, Raipur, casting doubt on the correctness of the previous judgment in SKF India Ltd. The matter was referred to a larger Bench for further consideration. The respondent's counsel acknowledged that the issue was pending before the larger Bench and had not been conclusively decided.Issue 3: Pending issue before a larger Bench regarding excise duty rulingsAcknowledging the unresolved nature of the legal issue, the court decided to dispose of the appeal while allowing the appellant the liberty to seek relief, including a refund, once the larger Bench had addressed and resolved the underlying legal question. The appellant had already paid the duty and interest demanded by the department, and the court's decision aimed to provide a pathway for potential future recourse based on the larger Bench's decision.In conclusion, the High Court's judgment recognized the complexity of the legal issue surrounding excise duty payments and interest liability, deferred to a larger Bench for resolution, and granted the appellant the right to seek appropriate relief post the larger Bench's decision.