COMMISSIONER OF CENTRAL EXCISE, PANCHKULA Vs. POLYPLASTICS

JUDGEMENT

(1.) The revenue has preferred these appeals (CEA Nos. 61 & 62 of 2008) under Section 35G of the Central Excise Act, 1944 (for brevity, The Act'), claiming that a substantial question of law would arise from the order dated 3-10-2007 (A-4) passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for short, The Tribunal'). The following substantial question of law has been claimed by the revenue : -

(2.) The dealer-respondent is holder of Central Excise Registration Certificate for manufacture of name plates, emblems and logos etc. under Chapter Heading No. 8708 of the schedule to the Central Excise Tariff Act, 1985. The revenue has claimed that the aforesaid items be classified under Chapter Heading 3926.90 of the schedule to the Central Excise Tariff Act, 1985. On scrutiny, it was found that for the months of October and November 2003 they have raised supplementary invoices and had also paid central excise duty on the same. Those invoices were issued subsequent to those invoices which were issued from January 2003 to August 2003 on removal of goods. The revenue claimed that interest becomes payable on duty paid on such supplementary invoices as per the rate prescribed under Section 11AB of the Act because the duty was not paid within the prescribed time. A letter was sent on 31-12-2003 which was duly replied by the dealer on 7-1-2004. The stand taken in the reply is that interest under Section 11AB of the Act is not recoverable in case where duty was not levied/paid or short paid/levied on account of fraud, willful mis-statement or suppression of facts. The dealer claimed that the duty has been paid within abona fide belief and there was no allegation or fraud or collusion. As such even, no demand was raised by the department.

(3.) Thereafter a show cause notice was also issued to the dealer on 19-10-2004 to show cause to the Assistant Commissioner as to why the amount on duty short paid by the dealer should not be demanded under the provisions of Section 11A of the Act and the amount already paid should not be appropriated against the demand. It was further alleged that why interest be not recovered from the dealer. The dealer contested the claim made by the revenue. However, the Assistant Commissioner ordered the recovery of interest amount. The rationale for the aforesaid view is discernible from the following paras of the order dated 25-1-2005 passed by the Assistant Commissioner : -