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Judgment
R. Muralidhar, Member (J)
The Appellant is a manufacturer of various Steel items. During the period March 1992 to May 1993, the Appellants have filed their price list provisionally wherein they have excluded the JPC Cess and value of railway packing. The price list was finally assessed by the Jurisdictional Commissioner on 11/12/1992 wherein, he has allowed the deduction of JPC Cess. The Appellant has followed this finalized price for the clearance between March 1992 to May 1993. Being aggrieved by the OIO passed on 11/12/1992 by the Assistant Commissioner, wherein the price list was finalized, the Department filed an Appeal before the Commissioner (Appeals). The Commissioner (Appeals) vide OIA dated 19/04/1994 has allowed the Department’s Appeal with a direction to AC to approve the price list by including the JPC Cess in the assessable value.
In the meanwhile, Show Cause Notice was issued on 22/2/1996 proposing to demand differential duty on account of addition of JPC Cess in the assessable value. This Show Cause Notice cited the OIO, dated 28/04/1994 wherein inclusion of CPC charges in the Assessable Value was confirmed. After due process, the Adjudicating Authority confirmed the Excise Duty of Rs.12,65,54,409/- vide OIO dated 18/11/1997. Being aggrieved, the Appellant filed an Appeal before Commissioner (Appeals) on 12/01/1998. The Commissioner (Appeals), vide OIA dated 28/10/1998 set aside the Order of the Adjudicating Authority on the ground that the issue as to whether JPC Cess is includable in the Assessable Value or not, is pending before the Supreme Court. In view of the Remand Order dated 28/10/1998, the Deputy Commissioner heard the parties and confirmed the demand vide OIO dated 25/08/2004. The Appellants, being aggrieved filed an Appeal before the Commissioner (Appeals) on the ground that the OIO is required to be set aside on account of limitation itself. The Commissioner (Appeals) vide OIA dated 15/12/2004, held that the SCN was time barred since the provisional assessment was finally assessed on 11/12/1992 and the Show Cause Notice was issued only on 22/2/1996. Further it was held that even if it is assumed that the assessment was finalized only on 31/10/1996, issue of Show Cause Notice on 22/02/1996 would be premature.
Being aggrieved, the Department filed an Appeal before the Tribunal on 10/03/2005. The Tribunal remanded the matter to the Commissioner (Appeals) vide their Final Order dated 31/03/2008 with a direction to consider all the grounds taken by the Department and assesse. The Commissioner (Appeals) vide the impugned OIA No. 53/CE/B-II/2008 dated 26/12/2008 confirmed the demand and held that interest is also required to be paid under Rule 7 of the Central Excise Rules, 2002. Being aggrieved, the Appellant is before the Tribunal which has come up for hearing before us today.
The Learned Counsel appearing on behalf of the Appellant submits that the Excise Duty for the period under dispute was provisionally assessed on 10/03/1992 and the same was finalized by the Assistant Commissioner vide his Order dated 11/12/1992. In this finalized Order, the Appellant was allowed the benefit of deduction of JPC Cess. The Department had filed an appeal against this OIO dated 11/12/1992 which came to be decided by Commissioner (Appeals) by allowing the Department’s Appeal on 19/04/1994. Vide OIA dated 19/04/1994, he held that JPC Cess is includable in the assessable value. The Learned Counsel submits that once the assessment Order is challenged in appeal which leads to confirmation of further demand against the assesse, the Department is bound to issue the SCN under Section 11A. In such a case, the provision relating to limitation of issuance of such Show Cause Notice would also apply. He relies on the case law of Mafatlal Industries Ltd. Vs. UOI, 1997 (89) E.L.T. 247 (S.C.). He draws our attention to Para 95 of this judgment which is reproduced below:-
Rule 9B provides for provisional assessment in situations specified in Clauses (a), (b) and (c) of sub-rule (1). The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that “when the duty leviable on the goods is asssessed finally in accordance with the provisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of or is in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be”.
Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B, as the case may be. However, if the final orders passed under sub-rule (5) are appealed against - or questioned in a writ petition or suit, as the case may be, assuming that such a writ or suit is entertained and is allowed/decreed - then any refund claim arising as a consequence of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9B(5) re-agitating the issues already decided under Rule 9B - assuming that such a refund claim lies - and is allowed, it would obviously be governed by Section 11B. It follows logically that position would be the same in the converse situation.[Emphasis supplied]
He submits that the Supreme Court has held that when Order for final assessment is challenged under Rule 9B (5), the provisions of Section 11B would be applicable. The Supreme Court also says that
“It follows logically that position would be the same in the converse situation”. He submits that even in respect of the Department, they are bound to issue the Show Cause Notice and they are also bound by the limitation placed under Section 11A. Section 11A clearly provides that the relevant date for issue of SCN where the duty is provisionally assessed, it is the date of adjustment of duty finally adjusted. In the present case, the final assessment was done on 11/12/1992. In such a case, the present Show Cause Notice should have been issued within 6 months (normal period at that point of time). However, admittedly, the Show Cause Notice was issued on 22/02/1996, wherein the provisions of extended period were not invoked. Another stand taken by the Appellant is that if the assessment was not finalized on 11/12/1992, but was finalized only on 31/10/1996 when the Superintendent of Central Excise the Finalized Assessment of RT-
12 Returns is taken as the date of assessment, the Department could not have issued the present Show Cause Notice on 22/02/1996 which would amount to premature issue of SCN since it has been issued even before the final assessment.
In view of the foregoing, he submits that the confirmed demand is liable to be set aside on account of time barred itself.
He further submits that the Show Cause Notice did not propose to charge any interest. The Commissioner (Appeals) vide the impugned order has demanded interest in terms of Rule 7 of CER, 2002. Therefore, he submits that impugned order has travelled beyond the scope of the Show Cause Notice. He relies on the following case laws:-
(i) CCE, Nagpur Vs. Ballarpur Industries Ltd., 2007 (215) ELT 489 (SC)
(ii) CCE, Bangalore Vs. Brindavan Beverages (P) Ltd., 2007 (213) ELT 487 (SC)
The Learned Counsel submits that on the issue as to whether JPC Cess is required to be added or not in the assessable value, the Supreme Court after taking up batch matters has decided the issue in favour of the Revenue holding that JPC Cess is required to be added as reported in the case of Tata Iron & Steel Co. Ltd. Vs. Collector of C. Ex., Jamshedpur-2002 (146) E.L.T. 3 (SC). Therefore, in the present arguments, they are contesting only on the issue of limitation. He submits that the only issue to be decided is as to whether the Department was correct in issuing the Show Cause Notice on 22/02/1996 in respect of the assessable value followed by the Appellant during the period March 1992 to May 1993 when assessment was finalized by the Assistant Commissioner on 11/12/1992.
The Learned AR reiterates that the Final price list finalized and approved by the Assistant Commissioner on 11/12/1992 was never accepted by the Department. This Order was challenged before the Commissioner (Appeals) who has set aside the OIO. He submits that in case of finalization of provisionally assessed goods, the limitation provided under Section 11A would not be applicable. Hence, the Appellant’s contention that the Show Cause Notice issued is time barred and is not legally sustainable. Therefore, he justifies the confirmed demand.
In respect of the interest, he submits that so long as the initial duty paid is revised and further differential duty is required to be paid on account of final assessment, the Appellant is required to pay the interest for which there is no provision to waive the same. He submits that the Appeal is required to be dismissed.
Heard both sides and perused the documentary evidence and the cited case law.
From the chronological events discussed above, it is seen that the Price List was provisionally assessed on 10/3/1992 and was Finally Approved on 11/12/1992. The Assistant Commissioner has passed an Order allowing deduction of JPC from the assessable value. The Appellant has followed this Order for their clearance during March 1992 to May 1993. In the absence of any Stay or adverse Order against this OIO during the period March 1992 to May 1993, it has to be concluded that the Appellant has followed the finalized price list which was available with them during that period. This being so, the Commissioner (Appeals) has set aside the OIO dated 11/12/1992 vide his OIA dated 19/04/1994. On going through this OIA, it is seen that he has given direction to the Assistant Commissioner to approve the price list after adding the JPC Cess. The Department has not brought out any evidence that this was done by the Assistant Commissioner by passing a suitable order to this effect. After more than two and half years from the date of this OIA, the RT-12 Returns have been finalized by the Superintendent on 31.10.1996 and intimation was given to the Appellant to this effect. Admittedly the Show Cause Notice was issued on 20/02/1996, after more than 20 months from the date of the Commissioner (Appeals) OIA, proposing to demand the differential duty of Rs.12,65,54,409/-. From this Show Cause Notice, it is observed that though the demand is for the period March 1992 to May 1993, no statutory provisions towards invoking the extended period have been cited.
It is also significant to note that as on the date of issue of Show Cause Notice concerned, the RT-12 Returns for the months under dispute were not even finalized and they attended finality only after Final Assessment of RT-12 on 31/10/1996 i.e. after about 8 months after the Show Cause Notice was issued.
Considering these facts, we are in agreement with the Appellant that the Show Cause Notice dated 22.02.1996 was issued in belated manner after about 3 years 8 months from the date of initial finalization done by AC on 11/12/1992. If it is taken that the Department had challenged this OIO and the price list approved by the Assistant Commissioner was finalized only after the OIA was passed on 19/04/1994, even from this date of OIA i.e. 19/04/1994, there is delay of more than 22 months in issuing the Show Cause Notice.
After going through the relevant paragraph of the judgment of the Hon’ble Supreme Court, in the case of Mafatlal Industries Ltd., it is seen that the Apex Court has made it clear that what is applicable to the assesse is made equally applicable to the Revenue also. Therefore, the Revenue cannot take the pleading that the provisions of Section 11A are not applicable to them in case of finalization of provisionally assessed RT-12 Returns.
In this case, we also note that the finalization of RT-12 for the period in question was completed on 31/10/1996. Therefore, we see force in the Appellant’s arguments that the Show Cause Notice issued on 22/02/1996 has to be assumed as premature if the RT-12 assessment date is taken as the date of final assessment.
In view of the foregoing, we hold that the impugned OIA is legally not sustainable and accordingly, we set aside the same and allow the Appeal. The Appellant would be eligible for consequential relief, if any, as per law.
The Appeal is disposed of thus.