ATUL LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, DAMAN

JUDGEMENT

(1.) THIS appeal and stay application have been filed against the order -in -appeal No. KKS/206/DAMAN/2008 dt. 29 -4 -2008 upholding the demand for differential duty on the Sulphuric Acid cleared by the appellants to another unit belonging to them. For the purpose of value, they have followed Rule 8 of Valuation Rules and during the audit of the unit, it was found that the duty paid at the time of clearance was less than payable as per the Valuation Rules. Accordingly, show cause notice was issued and demand for differential duty with interest was confirmed and penalty equal to duty amount was imposed. Commissioner (Appeals) however reduced the penalty to Rs. 25,000/ -, but the demand for interest has been upheld. There is no dispute about differential duty and the same has already been paid.

(2.) HEARD Shri Rakesh H. Shah, Manager -Excise and Customs of M/s. Atul Ltd. on behalf of the appellants. Since a short issue is involved, requirement of pre -deposit is waived and matter is taken up for final disposal with the consent of both the parties. He submitted that it has been a practice to work out the differential duty after finalization of the cost audit report by September and at the time of visit of CERA, they had seen the cost audit reports prepared by the Company, but not yet finalized in consultation with Cost Auditor and on the basis of the reports finalized by the Company the demand has been raised. In the normal course, they would have paid the differential duty after finalization of the cost audit report by the Cost Auditor. Therefore, he contends that no penalty is leviable and there is no liability for interest also. Apparently in this case provisional assessment has not been resorted to and therefore the verification of the cost audit report would take place only when the appellants pay differential duty. The ld. SDR on behalf of the Revenue submits that interest is payable when demand for differential duty arises as a result of revision of value and therefore the demand for interest has been correctly upheld.

(3.) I have considered the arguments from both sides. I find that interest is payable and no relief can be given since it is a statutory liability. As regards penalty in view of the submission that they had paid differential duty on their own during the previous years on finalization of cost audit report and during the present period also the cost audit report had not yet been finalized and therefore the same practice of paying differential duty after finalization of cost audit report would have been followed, I feel that imposition of penalty is not justified. Accordingly, the penalty imposed on the appellants is set aside. The interest liability will be discharged after the appellant receive the intimation from the Department in due course. The appeal is disposed of on the above terms. (Dictated & Pronounced in Court)