COMMISSIONER OF CENTRAL EXCISE Vs. MARUTI UDYOG LIMITED

JUDGEMENT

(1.) This order shall dispose of C.E.A. No. 24 of 2008 and C.E.A No. 122 of 2005 because common question of law and facts are involved. These appeals have been filed by the Revenue, under Section 35G of the Central Excise Act, 1944 (for brevity "the Act"). In C.E.A. No. 24 of 2008, the order dated 21-5-2007 [2007 (217) E.L.T. 233 (Tri.-Del.).] (P-3) passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi, is the subject matter of challenge. The Revenue has claimed that the following substantial question of law would arise for determination of this Court :

(2.) Before answering the aforesaid question, few facts necessary for disposal of the appeal may first be noticed. M/s. Maruti Udyog Limited (for brevity' dealer' are engaged in the manufacturing of motor vehicles and their parts falling under Chapter Heading 8702 and 8708 respectively of the Central Excise Tariff Act, 1985. The dealer was also availing Modvat/Cenvat credit of duty paid on the inputs used in the manufacturing of motor vehicles under Rule 57AB of the Act. They were served with a show cause notice dated 28-6-2001 alleging that a large number of parts manufactured by the dealer had been cleared without payment of central excise duty. In para 15 it was alleged that the dealer had removed/cleared IN HOUSE parts worth over rupees one crore, without payment of duty amounting to Rs. 16,53,011.73 during the period 1996-97 to 1999-2000. It was also alleged that the dealer had contravened provisions of Rule 52-A, 173-F and 173-G of the Act, because the IN HOUSE parts manufactured by the dealer were cleared without any valid invoice as those parts were not accounted for in the statutory record. The show cause notice also invoked the penal provision envisaged by Section 11AC read with Rule 173G. The show cause notice also raised demand under Section 11-AB of the Act. The Additional Commissioner adjudicated the matter and vide order-in-original dated 15-3-2002 (P-1), he raised various demands,

(3.) The dealer preferred an appeal against the order dated 15-3-2002 (P-1) passed by the Assessing Authority only to the limited extent of imposition of penalty and interest under Section 11AC and Section 11AB of the Act respectively. The dealer claimed that it has discovered the discrepancies during the stock checking and has paid the duty on its own much before the issuance of show cause notice. It is significant to notice in the process of stock checking and verification, the officers of the department were also joined. On finding of discrepancy the dealer had paid an amount of Rs. 5,78,737/- in October, 2000 and Rs. 10,74,274/- on 5-6-2001. In that regard intimation to the departmental authority was also sent. It is thus claimed that there was no suppression, misstatement or fraud with an intention to evade payment of duty as contemplated by Sections 11AC and 11AB. The dealer had contended on the basis of various judgments to the effect that if the duty has been paid before issuance of the show cause notice then no interest or penalty, as contemplated under Section 11AB and Section 11AC, would be attracted. The Appellate Authority, however, did not feel persuaded by the submissions made by the dealer and rejected the claim made in the appeal and upheld the imposition of interest and penalty imposed by the Assessing Authority under Sections 11AB and 11AC (P-2).