COMMISSIONER OF CENTRAL EXCISE Vs. VASU CHEMICALS

JUDGEMENT

(1.) THIS appeal of the department is against the order passed by the Commissioner of Central Excise. In the impugned order, learned Commissioner held that no evidence was available for clearance of 'green bars' by the respondents during 1992 -93 and accordingly he vacated the demand of duty on the said goods for the said period. The department is aggrieved by this part of the Commissioner's order. Learned Commissioner, in his order, had treated the value of clearances of the period 1993 -94 to 1996 -97 as cum -duty value and accordingly allowed the benefit of Section 4(4)(d)(ii) of the Central Excise Act to the respondents in the matter of valuation of the goods for levy of duty for the said period. The appellant is challenging this also. Learned Commissioner had also extended the benefit of input duty credit to the respondents and accordingly re -quantified the demand of duty against the party. Again, the appellant is against the grant of this benefit to the respondents. Yet another part of the impugned order which is under challenge in the present appeal is that the proposal to levy interest on duty under Section 11AB and to impose penalty on the party under Section 11AC of the Act was dropped on account of the fact that these provisions of law were not in force prior to 28.09.1996. These challenges have been summarised in para 3 of the grounds of this appeal, the relevant part of which is extracted below:

(2.) AFTER hearing both sides and considering their submissions, we find that the issue mentioned at S.No. (i) above is already covered by the Final Order No. 157 -168/2005 dated 27.01.2005 passed by this Bench in Appeal Nos.C/960 -971/1998 (Vasu Chemicals and Ors. v. Commissioner of Central Excise, Madurai) Z. In that batch of appeals, which were filed against the Commissioner's order impugned in the present appeal of the department, this Bench held that the demand of duty against M/s. Vasu Chemicals (respondents herein) for the period prior to January, 1995 was not sustainable. It is submitted by learned SDR that the above final order was taken in appeal to the Hon'ble High Court and that the said appeal (CMA No. 1220/2005) is pending. In answer to our query, it is submitted by learned SDR that the High Court has not stayed the operation of the above final order. In the circumstances, the claim of the appellant for demanding duty from M/s. Vasu Chemicals for the year 1992 -93 is no longer valid. From the submissions made by both sides, it also appears to us that the question whether the value of clearances made by the respondents during 1993 -94 to 1996 -97 was liable to be treated as cum -duty value in terms of Section 4(4)(d)(ii) is also covered against the appellant by the Hon'ble Supreme Court's judgment in Commissioner of Central Excise v. Maruthi Udyog Ltd.

(3.) THE appellant wants interest to be levied on duty under Section 11AB and also penalty to be imposed on the respondents under Section 11AC. The demand of duty for an earlier part of the period of dispute has already been vacated by this Tribunal. The rest of the period is upto 11.10.1996. The above provisions of law came into force on 28.09.1996. Neither any interest under Section 11AB nor any penalty under Section 11AC was liable to be levied for any period prior to 28.09.1996 as held by the apex court in Commissioner of Central Excise, Coimbatore v. Elgi Equipments Ltd. 2001 (128) E.L.T. 52 (S.C.). The appellant has not chosen to distinguish the terminal period (28.09.1996 to 11.10.1996) for the purpose of applying the provisions of Section 11AB and Section 11AC. In the circumstances, the issue mentioned at S. No. (iv) above also gets covered against the appellant. What remains is the question (vide S. No. (iii) above) whether the benefit of Modvat credit on duty -paid raw materials is admissible to the respondents. This question was considered by the Commissioner in the impugned order and he is bound to consider the same, again, in the remanded proceedings. In any case, we direct learned Commissioner to consider this question while passing de novo adjudication order pursuant to final order dated 27.01.2005 ibid.