2014 (10) TMI 447

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....in brief are as follows:- The Appellant, a company is inter alia engaged in the manufacture of Liquid Hair Dye (the product) falling under Tariff Item No.68 of the First Schedule to the Act during the period from September, 1982 to March, 1985 (the relevant period). The Appellant filed classification list in terms of Rule 173B of the Central Excise Rules [the Rules] classifying the product. On or about 13th July, 1982 the department issued a show cause notice bearing No.Gen.6/VL/IV/ Godrej/Soap/81/Pt.II/5619 calling upon the Appellant to show cause as to why the product cleared by the Appellant should not be classified under Tariff Item 14F. Meanwhile, it allowed the Appellant to clear the goods provisionally under Tariff Item 14F pending a final decision as to classification. On or about 8th September, 1982, the Appellant filed revised classification list and price list and disputed the classification proposed by the department as 14F. In anticipation of finalisation of the provisional assessment, the Appellant computed duty under Tariff Item 14F till March, 1985. In response thereto, the Superintendent of Central Excise vide letter dated 14th September, 1982 allowed clearances....

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....ed. Written submissions were also filed. 6. After the hearing, vide order-in-original dated 25th June, 2012 the Additional Commissioner of Central Excise, Mumbai II confirmed the demand of Rs. 20,84,955.72 under section 11A(2) of the Act along with interest under section 11AB and also imposed penalty of Rs. 20,84,960/- under Rule 173Q(1) of the Rules. On 21st August, 2012 the Appellant paid a sum of Rs. 20,84,956/- which was demanded in the order dated 25th June, 2012 and filed an appeal before the Commissioner of Central Excise, which came to be heard on 10th December, 2012 and resulted in the entire demand being confirmed vide order dated 31st December, 2012, including the amount of penalty. It was held that the duty paid at the time of removal of goods was not in accordance with the provisional assessment inasmuch as the Appellant contravened the provisions of section 4(4)(d)(ii). The order relied upon the judgment of this Court in the assessee's own case in Writ Petition No.1460 of 1983 holding that the demand is maintainable applying principles to analogous to section 11D of the Act, therefore, the interest and penalty are payable. 7. We may observe at this stage tha....

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....ising out of a suit decided long before the amendment introducing enhanced Court fees is part of putting a restriction on the right to appeal. 11. The judgment in Supreme General Films Exchange Ltd. was approved in Hosssein Kasam Dada (India) Limited V/s. State of Madhya Pradesh & Ors. reported in 1983(13) E.L.T. 1277 (S.C.) which held that a pre-existing right of appeal is not destroyed by amendment, unless the amendment is made retrospective with the express words or necessary intent. Mr.Sirdharan further submitted that the pre-existing right to appeal continues to exist, that parties must be given the exercise and enforcement of that right and there can be no question of the amended provision preventing the exercise of that right. It also observed in its concluding portion that until the actual assessment, there can be no lis and, therefore, no right of appeal can accrue before that event. 12. Mr.Mishra, learned counsel for the respondents came out in support of the impugned order and contended that the Appellant has taken advantage of lower rate of duty and has collected higher amounts from customers and that the assessee has utilised the money which was legitimately due ....

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.... Credit Rules, 2004; (v) interest payable under the provisions of this Act or the rules made thereunder. 15. Although, it includes the provisions of deposit of interest payable under the provisions of the act or the rule, what remains to be considered is whether the assessee is liable to pay interest in accordance with law. 16. Applying the above test to the facts of the present case, we find that the explanation to Section 35F details the expression of "duty demanded" so as to include any amount determined under section 11D of the Act. Thus, explanation was inserted with effect from 11th May, 2007 by section 131 of the Finance Act, 2007. 17. The test is, therefore, whether section 11D could be invoked in the present case. Section 11D of the Act reads as under:- " 11D. Duties of excise collected from the buyer to be deposited with the Central Government - (1) Notwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder, [every person who is liable to pay duty under this Act or the rules made thereunder, and has collected any amount in excess of th....

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....n. The provisions of section 11D(1A) as amended do not take effect prior to 10th May, 2008. 19. In the present case, the provisional assessment was made on account of the disputed classification of the product. The relevant date in cases where duty of excise is provisionally assessed is the date of adjustment of duty after the final assessment. As a result Section 11A comes into reckoning only after the final assessment has taken place. If the Central Excise Officer concludes that duty has been short levied, the officer is empowered to take proceedings under section 11A within limitation after issuing show cause notice. Final assessment is a condition precedent for invocation of section 11A. 20. Mr.Sridharan, learned Senior Counsel for the Appellant points out that this legal position is settled beyond doubt in the case of Serai Kella Glass Works V/s. CCE reported in 1997(91) ELT 497 (SC), wherein in paragraph 18, the Supreme Court has held as follows:- "18. After final assessment, a copy of the order on the return filed by the assessee has to be sent to him. Duty has to be paid by the assessee on the basis of the final assessment within ten days from time from the receipt....