CX - Period of limitation not only applies to principal, but also applies for recovery of interest: CESTAT
By TIOL News Service
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NEW DELHI, MAR 02, 2017: THE appellant is engaged in manufacture of body building motor vehicles, falling under Chapter 87 of the Central Excise Tariff Act, 1985. The appellant receives duty paid chassis from M/s Tata Motors and thereafter upon building the body, removes the same on payment of Central Excise Duty on some occasions, Tata Motors amends the purchase orders in view of revision in the sale prices. Based on the revision of price, the appellant submits supplementary bills after receiving amended purchase orders and raises debit notes, giving reference to the purchase orders. During the disputed period, due to oversight, the appellant did not pay the duty on the revised price. On being pointed out by the department, the appellant paid the duty of Rs. 5,57,885/- on 11.01.2005. Thereafter, the department issued the SCN on 15.04.2008, seeking appropriation of the said amount deposited by the appellant and also for confirmation of interest liability and for imposition of penalty. The said SCN was adjudicated vide order dated 31.03.2009 in confirming the proposals made therein. In appeal, the Ld. Commissioner (Appeals) vide the impugned order has upheld the adjudged demand. Hence, the present appeal is before the Tribunal.
The appellant contended that the differential duty of Rs. 5,57,885/- was deposited by the appellant on 11.01.2005 and thereafter the SCN was issued after one year, seeking recovery of the interest amount. S ince there is no element of fraud, suppression of facts, with intent to evade payment of duty, SCN seeking recovery of interest amount should be confined to a period of one year.
After hearing both sides, the Tribunal held:
+ It is an admitted fact on record that the differential duty was paid by the appellant on pointing out the mistake by the department on 11.01.2005 and thereafter the SCN was issued on 15.04.2008, seeking recovery of the interest amount and for imposition of penalty. The said SCN has been issued under the proviso to Section 11A ibid. The facts regarding finalization of the provisional price, issuance of supplementary bills, payment of differential duty etc. were known to the department, and in such eventuality, the department should have issued the SCN within one year from relevant date i.e. 10.01.2006. In this case, since admittedly the SCN was issued on 15.04.2008, the same , is barred by limitation of time.
+ The Central Excise Act provides a time limit of one year from the relevant date for demand of duty in normal circumstances and a time limit of five years for demand of duty in cases where fraud, suppression of facts, collusion, etc. are involved. In the instant case, there is no allegation that the assessee delayed payment of duty on account of any of these elements. On the other hand, it is very clear that the assessee had discharged the differential duty liability on their own. The differential duty payments were made during the period from May, 2004 to March, 2009 and were also reflected in the corresponding monthly returns filed by the assessee. Thus, the department was fully aware that the assessee was raising supplementary invoices for recovery of differential prices subsequent to the clearance of the goods and they were also discharging differential duty liability on issue of supplementary invoices.
+ In view of the above, the appeal is allowed to the extent of setting aside the amount of interest and penalty confirmed in the impugned order.
(See 2017-TIOL-656-CESTAT-DEL)
