TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 740
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.... thereon confirmed against the appellant, M/s. Madhukar SSK Ltd. along with imposition of penalty of an equivalent amount under Section 11AC of the Central Excise Act read with Rule 173Q of the Central Excise Rules, 1944. Aggrieved of the same, the appellant is before us. 3. The facts relevant to the case are briefly as follows:- 3.1 The appellant is a manufacturer of sugar, molasses and ethyl alcohol. The Directorate of Sugar, New Delhi issued release orders dated 30/09/1997 & 27/10/1997 in favour of the appellant for clearance of 15,681 quintals of sugar under the levy sale sugar quota. Accordingly, the appellant cleared the said quantity of sugar during November 1997 to December 1997 paying the concessional rate of duty applicable to l....
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....invoking non-existent provisions would render the demand unsustainable. It is also contended that penalty has been imposed under Rule 173Q read with Section 11AC and since the said rule was not in vogue in 2002, the penalty imposed is also not sustainable. Reference is placed on the decision of the Hon'ble High Court of Karnataka in the case of CST Bangalore Vs. The Peoples' Choice - 2014-TIOL-431-HC-KAR-STwherein it was held that demand invoking obsolete provisions is not sustainable. Similarly, reliance is also placed on the decision of the Hon'ble Apex Court in the case of CCE Vs. HMM Ltd. - 2002-TIOL-120-SC-CX wherein it was held that to invoke the extended period of time, it must be shown that excise duty escaped payment by....
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....e correspondence, the fact of conversion of levy sugar to free sale sugar was never intimated to the department by the appellant and therefore, the extended period of time has been rightly invoked and consequently the confirmation of demand with interest along with equivalent amount of penalty under Section 11AC are sustainable in law. He relies on the decision of this Tribunal in UP State Sugar & Cane Development Corporation Ltd., Vs. CCE, Allahabad - 2009 (242) ELT 260 (Tri-Del) and Shree Satpuda Tapi Parisar SSK Ltd., Vs, CCE, Nasik - 2013 (297) ELT 410 (Tri-Mumbai) wherein it was held that when levy sugar quota is converted into free sale sugar, subsequently the appellant is liable to discharge differential duty applicable to free sale ....
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....refore, clearances of sugar was under free sale quota and therefore, the discharge of duty liability on such clearance under levy sugar quota was not in accordance with law. The change of release of sugar from levy to free sale was never intimated to the department by the appellant, in spite of having received the consideration for the free sale release. The appellant has contended that the duty demand has been made under wrong provisions which were not in existence at the time of issue of show-cause notice. This contention of the appellant is completely incorrect for the reason that differential duty was demanded under the provisions of Rule 9 (2) of the Central Excise Rules, 1944 read with provisions of Section 11A of the Central Excise A....
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....sustainable. In the UP State Sugar & Cane Development Corporation Ltd. and Shree Satpuda Tapi Parisar SSK Ltd. cases (cited supra), this Tribunal has consistently held that differential duty is required to be paid when the amount is reimbursed by the Central Government treating levy sugar quota as free sale sugar subsequently. It was further held that interest is also applicable when there was a short payment for the delay in payment of duty. In any case, interest is a compensatory payment for the delay in payment of duty. Accordingly, whenever there is a delay in payment of duty, interest liability has to be discharged from the due date of payment till the actual date of payment. 6.4 In view of the above factual and legal position, we do ....