TaxTMI 
TaxTMI 
2015 (12) TMI 1049
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.... Tribunal vide Final Order dated 10.5.2011 allowed the appeals of the Department and held that mahamai (charity) charges to be included in the assessable value and dismissed the assessee's appeals except allowing cum-duty benefit. 3. Consequent upon the Tribunal's final order, the adjudicating authority re-determined the differential duty and allowed cum-tax benefit and confirmed the demand along with interest and imposed penalty. The appellants accepted and paid the differential duty however contested the interest and penalty. On Appeal, Commissioner (Appeals) upheld the demand of differential duty and interest and set aside the penalty. Against this appellant preferred appeal Nos. E/40135 to 40138/2013 and E/40214 to 40221/2013 before this Tribunal only against levy of interest under section 11AA as amended. 4. This Tribunal by exparte Final Order No. 40138 to 40149/2014 dated 24.1.2014 dismissed all the 12 appeals and upheld the impugned order. Against the Tribunal's final order, the appellants preferred appeals before the Hon'ble High Court of Madras. The Hon'ble High Court of Madras in its order dated 12.8.2015 in CMA Nos. 902 to 913/2014 set aside the Tribunal's final o....
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....that the period involved in these appeals are from July 2000 to July 2010. He drew attention to provisions of section 11AA and section 11AB as it stood with effect from 26.5.1995 and subsequently section 11AB came into effect from 28.9.1996. As per section 11AA as it existed during the material period, the interest is payable only after three months of the determination of duty. He submits that they are not covered under section 11AB as there is no willful evasion, fraud or collusion. He submits that section 11AB is further amended with effect from 11.5.2001 wherein sub-section (1) of section 11AB was amended which is applicable from 11.5.2001. He further submits that since both the sections 11AA and 11AB provides interest clause they are covered under section 11AA not under 11AB. Therefore, he submits that interest can be demanded only after three months of the determination of duty not from the date when the duty has become due. Even otherwise he submits that 4 appeals Sl. No. 1 to 4 mentioned in the written submission are covered under pre amended sections of 11AA as it stood on 28.9.1996 and the remaining 5 to 41 appeals are covered under both section 11AB and section 11AA afte....
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....re issued for addition of charity amount received from the buyers in the transaction value under section 4 of Central Excise Act, 1944 read with Section 14 of Valuation Rules. Both Revenue and appellant preferred appeals before the Tribunal and the Tribunal in the Final Order allowed the Revenues appeal and rejected the assessee's appeals except allowing cum-tax benefit. 9. After initial round of litigation before the adjudicating authority and the Commissioner (Appeals), the Tribunal in the Final Order Nos. 586 to 590/2014 dated 10.5.2011 settled the issue on valuation holding that "mahamai" collected by the appellant is includible in the assessable value. Consequent to the order, the adjudicating authority has re-determined the duty after allowing cum-tax benefit. 10. On perusal of the impugned order, we find that the adjudicating authority in all his orders re-determined the duty and also demanded interest under amended section 11AA which was in force during the period and also imposed penalty. On appeal, the lower appellate authority upheld the demand and interest and waived the penalty. 11. The appellant's main contention that the amended section 11AA is not applicab....
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....be read as these provisions shall not apply to cases where duty has become payable or ought to have paid before 11-5-2001 when the Finance Bill, 2001 was given assent to by the President. In short it is the submission that provisions of sub-section (2) of Section 11AB has done away with the provisions of Section 11AB as it stood prior to 11-5-2001 in so far as the cases wherein the demand of the duty has been confirmed in accordance with the Proviso to Section 11A of the Central Excise Act, 1944. That is to say that when the demand of the duty is confirmed by invoking extended period and by alleging suppression, misstatement and collusion and fraud with intend to evade payment of duty, no interest is liable to be paid by an assessee after the enactment of the proviso to sub-section 2 of Section 11AB of the Central Excise Act, 1944 after 11-5-2001. 7. We do not agree with the contentions marshalled by the learned counsel for more than one reason. Firstly, the provisions of sub-section 2 of Section 11AB as was brought into statute on 11-5-2001 do not indicate the intention propounded by the ld. counsel. The provisions for charging of interest under the Central Excise Act wer....
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....mount of duty had been deposited by the assessee before issue of show-cause notice? B. Whether it was mandatory to impose penalty equal to amount of duty alleged to have been evaded, or discretion to impose less penalty or no penalty was vested in the authorities under Section 11AC of the Act ?" 9. Hon'ble High Court of Gujarat after considering all the submissions made by the ld. counsel and considering provisions of Section 11AB prior to 11-5-2001 and post 11-5-2001, laid down a ratio at paragraph No. 18 which we reproduce. "18. So far as the appeal filed by the revenue is concerned, the Tribunal has deleted the interest only on the ground that the demand relates to the period of 1997 to 2000 and on that count, it was held that no interest is leviable in respect of demand prior to 11-5-2001. It is, however, contended before us that while taking the said view, the Tribunal has only considered the provisions of sub-section (2) of Section 11AB brought on the Statute Book by the Act 14 of 2001 with effect from 11-5-2001. Prior to the said provision, Section 11AB was inserted by Section 76 of Finance (No. 2) Act of 1996 with effect from 28-9-1996. It appears....
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....ifferent consequences and are dealt with differently. Section 11A, however allow the assessees in default in both kinds of cases to make amends, subject of course to certain terms and conditions. The cases where the non-payment or short payment etc. of duty is by reason of fraud collusion etc. are dealt with under sub-section (1A) of Section 11A and the cases where the non-payment or short-payment of duty is not intentional under sub-section (2B). 10. Sub-section (2B) of Section 11A provides that the assessee in default may, before the notice issued under sub-section (1) is served on him, make payment of the unpaid duty on the basis of his own ascertainment or as ascertained by a Central Excise Officer and inform the Central Excise Officer in writing about the payment made by him and in that event he would not be given the demand notice under sub-section (1). But Explanation 2 to the sub-section makes it expressly clear that such payment would not be exempt from interest chargeable under Section 11AB, that is, for the period from the first date of the month succeeding the month in which the duty ought to have been paid till the date of payment, of the duty. What is stated ....
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.... applicable, and therefore, the Assessee was not required to pay interest." 13. It further held that a case of this nature would not fall in the category where duty of excise was not paid or short-paid. 14. We are unable to subscribe to the view taken by the High Court. It is to be noted that: the assessee was able to demand from its customers the balance of the higher prices by virtue of retrospective revision of the prices. It, therefore, follows that at the time of sale the goods carried a higher value and those were cleared on short payment of duty. The differential duty was paid only later when the assessee issued supplementary invoices to its customers demanding the balance amounts. Seen thus it was clearly a case of short payment of duty though indeed completely unintended and without any element of deceit etc. The payment of differential duty thus clearly came under sub-section (2B) of Section 11A and attracted levy of interest under Section 11AB of the Act. 15. for the reasons discussed above we set aside the judgments and orders passed by the Tribunal and the Commissioner (Appeals). We restore the order passed by the Assistant Commissioner in so....