2019 (2) TMI 1228 - AT - Central Excise

Tribunal affirms decision on interest demand post-assessment, highlighting finality of rulings

Commissioner of Central Excise & ST, Vadodara Versus M/s. Indian Oil Corporation Limited

The Tribunal upheld the Commissioner (Appeals)' decision in a case involving a dispute over the demand of interest by the revenue post-assessment of Bills ... Demand of Interest - delay in clearance of goods from the warehouse - finalization of provisional assessment of Bills of Entry - whether the demand of interest made subsequent to finalization of the assessment of Bills of Entry, is correct and legal for delay in clearance of goods from the warehouse, under Section 61? - Held that:- The said demand was set-aside by the Tribunal in INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX., VADODARA [2007 (9) TMI 127 - CESTAT, NEW DELHI] - the very same demand of interest has been set-aside by the Tribunal even against the provisional assessment of Bills of Entry and since the department has not challenged the Tribunal’s order, the same attained finality. Validity of second SCN - Held that:- Since the show cause notice for the demand had already been issued and the same was held to be time-barred by the Tribunal, for the same demand, second show cause notice is bad in law and is illegal. Therefore, the demand in the show cause notice in the present case itself is illegal. Appeal dismissed - decided against Revenue. Issues:Demand of interest subsequent to finalization of assessment of Bills of Entry for delay in clearance of goods from warehouse under Section 61.Analysis:The case involved a dispute regarding the demand of interest by the revenue subsequent to the finalization of the assessment of Bills of Entry for delay in clearing goods from the warehouse under Section 61. The appellant, engaged in the manufacture of excisable petroleum products, filed a refund claim on the grounds of overpaid customs duty during provisional assessment of Bills of Entry for warehousing. A show cause notice was issued seeking to appropriate unpaid interest from the refund. The Assistant Commissioner sanctioned the refund but appropriated the interest. The appellant appealed before the Commissioner (Appeals), who allowed the appeal, leading to the revenue's appeal.The revenue argued that since the Bills of Entry were finalized, the demand for interest was correct and legal, despite the issue of interest being previously decided by the Tribunal. The respondent contended that the issue of interest had already been decided by the Tribunal, and the demand was time-barred, attaining finality. The Tribunal had set aside the demand of interest even against provisional assessment, and since the department did not challenge this decision, it became final. Therefore, the demand in the present case was deemed illegal.Upon careful consideration, the Tribunal analyzed the submissions and records. It was noted that the demand of interest had been previously set aside by the Tribunal, and the subsequent demand was deemed illegal and against the doctrine of judicial discipline. The Assistant Commissioner's actions were considered to exceed jurisdiction by appropriating interest that had been set aside and accepted by the department. The Tribunal found no grounds to uphold the demand for interest and concluded that the impugned order was not legally correct.The detailed findings of the Commissioner (Appeals) were reviewed, and no infirmity was found in the impugned order. Consequently, the impugned order was upheld, and the revenue's appeal was dismissed. The Tribunal emphasized the finality of the Tribunal's order once accepted by the department, preventing the matter from being reopened. The case highlighted the importance of adhering to legal decisions and principles in matters of interest demands and final assessments of Bills of Entry.