Commissioner of C. Ex. and Customs vs Alka Fashion

K.A. Puj, J.—The Commissioner of Central Excise & Customs Surat-I has filed this Tax Appeal under Section-35G of the Central Excise Act, 1944 proposing to formulate following substantial questions of law for determination and consideration of this Court.

(1) Whether, in the facts and circumstances of the case, both the CESTAT and the Commissioner (A) have erred in law in not accepting the contention of the revenue that for determining the amount payable under Rule 3(4) of CENVAT Credit Rules, 2002 as per FIFO method, first month should be December, 2003 and not January, 2004?

(2) Whether, in the facts and circumstances of the case, the learned CESTAT has erred in law by overlooking the contention of the revenue that the adjudicating authority in its order-in-original had rightly imposed penalty and interest on the Assessee for the contravention of the CENVAT Credit Rules, 2002?

Heard Mr. Varun Patel, learned Standing Counsel appearing for the revenue and perused the orders passed by the authorities below.

The short point involved in this Appeal is in relation to the application of FIFO method of calculation. The show cause notice was issued which was adjudicated upon by the adjudicating authority. The differential Central Excise duty of Rs. 2,50,608/- was demanded under Rule-12 of the CENVAT Credit Rules, 2002 and Section-11(A)(2) of the Central Excise Act, 1944 and also interest on delayed payment of duty was demanded u/s 11AB of Central Ex-cise Act, 1944 and penalty of Rs. 2,50,608/- was imposed under Section-11AC of Central Excise Act, 1944 read with Rule-25 of Central Excise Rule, 2002 and Rule-13 of CENVAT Credit Rules, 2004.

Being aggrieved by the said order of adjudicating authority the Respondent-Assessee filed an Appeal before the Commissioner (Appeals) who vide his order dated 28-11-2006 allowed the said Appeal accepting the contention of the Respondent Assessee that the computation by the department for the input cleared as such after applying FIFO method by counting first month from the month of December, 2003 was incorrect. Instead of that, raw-material purchase date of January, 2004 has to be taken into account.

The revenue was aggrieved by the said order of the Commissioner (Appeals) and challenged the said order before the Tribunal. The Tribunal vide its order 30-1-2009 [2009 (248) E.L.T. 851 (Tri.-Ahmd.)] confirmed the order of Commissioner (Appeals) on this issue observing therein that the first Appellate Authority has passed a detailed order and has taken into consideration the entire facts and circumstances, including the calculations and has come to a right conclusion.

We have considered the submissions made by the learned Standing Counsel and gone through the orders passed by the authorities below. The learned Commissioner (Appeals) has clearly stated in its order that according to Annexure-A to the show cause notice the most proximate month from the date of clearance of inputs is January, 2004 and, therefore, instead of December, 2003 first of all raw materials purchased date of January, 2004 have to be taken into account. He has, therefore, held that by applying FIFO method the department should have taken into account instead of December, 2003 January, 2004. This finding of fact was confirmed by the Tribunal.

Since both the Appellate authorities have given finding of fact on the above issue we are of the view that no question, much less any substantial question of law, arises out of the order of the Tribunal. We, therefore, dismiss this Appeal.