TaxTMI 
TaxTMI 
2013 (9) TMI 310
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng "other charges". Consequently, it was found that the appellant was liable to pay Rs. 1,94,98,643/- during the period from April 2002 to September 2004. The entire amount of duty was paid by the appellant on 3-1-2006 and thereafter, show cause notice was issued to the appellant requiring them to show cause as to why they should not be required to pay interest as applicable and why penalty should not be imposed on them under Section 11AC of Central Excise Act, 1944. The Commissioner, in his impugned order, upheld the liability of interest and imposed penalty equal to the duty paid by the appellant. Hence the present appeal. 2. Learned advocate on behalf of the appellants submitted that in the case of Public Section Undertakings, the question of suppression does not arise. In this case, it was a bona fide mistake on the part of the appellant and there was no intention to evade duty. Therefore, suppression of facts and mis-declaration could not have been alleged. Further, in support of his contention that the extended period could not have been imposed, he submitted that in terms of decision of Hon'ble Supreme Court in the case of Baroda Electric Meters Ltd., 1997 (94) E.L.T. 13 (S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arned brother, the same are not being repeated here to avoid redundancy. 5. I find that though the appellants had deposited the duty of Rs. 1,94,98,643/- on 3-1-2006, on being pointed out by the Revenue, the same was for the period from April 2002 to September 2004. Thereafter, a show cause notice was issued to the appellant on 5-5-2006 requiring the appellant to show cause as to why total Central Excise duty of Rs. 1,94,98,643/- should not be demanded and recovered from them by invoking extended period of limitation of 5 years. The notice further observed that as the amount stand deposited by them, why the same should not be appropriated against same demand. The notice also proposed confirmation of interest and imposition of penalty under Section 11AC of Central Excise Act, 1944. As such, it may be observed here that the show cause notice was issued for confirmation of demand of duty as also of interest and imposition of penalty and the same was not only in respect of interest and penalty as observed by learned Member (Technical). As such, I find that the issue as to whether the demand of duty is required to be confirmed against the appellant or not is also the subject matter of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bsp; M/s. Rine Engineering Pvt. Ltd. v. CCE, Chandigarh - 2008 (86) RLT 933 (CESTAT-Del.) (g) CCE, Mumbai v. M/s. Cable Corpn. of India - 2008 (85) RLT 759 (CESTAT-Mum.) Ratio of the above decisions is that excess recovery of freight or of insurance amount collected from the buyers than the amount actually incurred, is not required to be added in the assessable value. As such, I am of the view that even if the appellants have recovered excess amount from buyers by calculating the Sales Tax liability on the assessable value, they are not liable to pay any amount on that ground to Revenue, as such excess recovery is on account of non-manufacturing activities and have no nexus to the price of the manufactured goods. Any amount recovered/attributable to other expenses i.e. sales tax is not includible in the transaction value and excess recovery has to be considered as profit on non-manufacturing activities, in the light of the ratio of law declared in the above decisions, especially when the same was not represented to the customers, as payable to Government of India inasmuch as there was no liability on the appellant to pay sales tax. 9. At this stage, I may....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g the same in Central Excise invoices, I fail to understand as to how the charges of suppression or mis-statement with intent to evade payment of duty, can be alleged against the appellant so as to invoke longer period of limitation. The issue is admittedly capable of two different interpretations and if the appellant have re-calculated the Sales Tax on the total which value including the value of Sales Tax, which calculations have come on higher side, the appellant cannot be held guilty of any suppression. The issue is definitely a bona fide dispute as regards interpretation of the relevant valuation provisions. In such a scenario, the ratio of the law declared by Hon'ble Supreme Court in number of decisions including their judgment in the case of M/s. Padmini Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) and M/s. Chemphar Drugs & Liniments - 1989 (40) E.L.T. 276 (S.C.), would fully apply to the facts of the instant case. Accordingly, the demand is barred by limitation. The confirmation of the same is required to be set aside along with setting aside of confirmation of demand. 11. In any case, the appellant is a Public Sector Undertaking and cannot be said to have any mala fide i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nalty is required to be set aside in its totality as held by Member (Judicial). 9. Whether the appeal has to be rejected in terms of order proposed by learned Member (Technical) or the same has to be allowed as held by Member (Judicial). 13. [Per : M.V. Ravindran, Member (J)]. - I have been nominated by Hon'ble President for deciding the points of difference arose between the Bench while deciding the appeal No. E/527/2007 of the assesssee. 14. Following Difference of Opinion are indicated :- (i) Whether the proposal in the show cause notice was only in respect of interest and penalty as held by learned Member (Technical) or whether the proposal also related to the confirmation and appropriation of demand of duty already deposited by the appellant, as observed by Member (Judicial). (ii) Whether an order is required to be passed on duty confirmation also as observed by Member (Judicial) or the dispute is only of interest and penalty as held by learned Member (Technical). (iii) Whether the excess recovery of Sales Tax made by the appellant is required to be added in the assessable value of their final produ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....were delivered by the Tribunal, post amendment to the provisions to Section 4 of Central Excise Act, 1944. He would submit that the decision of the Tribunal in the case of Cable Corporation of India Ltd., 2008 (85) RLT 759 (CESTAT-Mum.) is one such decision and submits that the amount which was collected even if is in excess of actual, need not be included in the assessable value is the decision. 16.1 It is his submission that the appellant being a Public Sector Undertaking, has no intention to evade duty. It is well settled by the Tribunal in the case of Markfed Refined Oil & Allied Indus., 2008 (229) E.L.T. 557 (Tri.-Del.). It is his submission that aggrieved by the said decision of the Tribunal, Revenue took up the matter before Hon'ble Punjab & Haryana High Court in the case of Markfed Refined Oil & Allied Indus. in Appeal No. 46/2009(O & M), wherein Hon'ble High Court has clearly held that it is not easy to infer any evasion of duty much less its intention to do so as reported in 2009 (243) E.L.T. A91 (P & H). It is also his submission that this Bench in the case of Hindustan Petroleum Corpn. Ltd., 2001 (136) E.L.T. 943 (Tri.-Kolkata) has held that the assessee being a Public....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lty liability and had not congested the duty demand. For this purpose, he would draw my attention to the Page 7 of Order-in-Original. He would submit that the order of the ld. Member (Technical) is correct. 18. In the rejoinder, ld. Counsel, drew my attention to the Para 9 of Order-in-Original and submits that during the personal hearing, the appellant had clearly taken plea that there is no suppression of fact and the duty paying documents like invoices and returns were submitted which indicated the amount of sales tax collected and hence invocation of extended period of 5 years under proviso to Section 11A of Central Excise Act, 1944 is not justified. It is his submission that the judgment of co-ordinate Bench of the Tribunal in the case of Mercedes Benz India Pvt. Ltd. v. CCE, Pune - 2010 (260) E.L.T. 149 (Tri.-Mumbai), will also be considered for this proposition, as the said judgment has followed the decision of the Hon'ble Supreme Court in the case of Baroda Electric Meters Ltd., 1997 (94) E.L.T. 13 (S.C.) post 1-4-2000, wherein the transaction value concept was incorporated in the statute. It is his submission that the decision of Hon'ble High Court of Bombay in the case of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....da Electric Meters Ltd., agreed with the view taken by ld. Member (Judicial). It is also seen that in the recent judgment of co-ordinate Bench in the case of Mercedes Benz India Pvt. Ltd. 2010 (260) E.L.T. 149 (Tri.-Mumbai), the co-ordinate Bench has taken a view that post 1-4-2000, when the provision of transaction value was brought into, the law position remains the same. I may respectfully reproduce the relevant portions of the judgment. "6. ...............We are also of the view that the decision of the Hon'ble Supreme Court with regard to the nature of the excess freight would not have been different, had their lordships considered the case for any period after 1-7-2000. The reason is that the crucial question is one of fact rather than of law. The question of fact as to the nature of the excess freight stands determined for all times by the Apex Court and accordingly, we hold that the excess freight collected from the dealers was only a profit on transportation and not an "additional consideration" within the meaning of this expression used in Rule 6, nor an "additional amount" within the meaning of the definition of "transaction value" under Section 4(3)(d) of the Act. In t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rity and/or before Tribunal. It is seen that the appellant has taken this plea in the personal hearing before adjudicating authority, wherein it was clearly argued that the demand of duty is time barred, as there is no suppression of fact and hence the claim of SDR that the appellant did not contest the demand of duty before the authorities seems to be incorrect. 24. As regards extended period of limitation, I find that there is no dispute that the worksheet attached to Show Cause Notice had calculated the amount of differential duty which has to be demanded from the appellant, was in respect of excess sales tax collected. The said details were worked out from the invoices which were raised by the appellant during the relevant period. On perusal of the said invoices, I find that the appellants were showing the amount which has been collected by them in form of sales tax. These will indicate that there was some kind of information given on the invoices to the authorities. Be that it may be, I find strong force in the contention of the ld. Counsel that the appellant being a Public Sector Undertaking, there cannot be mala fide for non-discharge of excise duty, if any and there cannot....