At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai
By, THE HONORABLE JUSTICE: RAMESH NAIR
By, MEMBER AND THE HONORABLE JUSTICE: RAJU
For Petitioner: Rajesh Ostwal, Advocate And For Respondents: S.V. Nair, AC (AR)
1. The issue involved is that whether in terms of Rule 6(3)(b) the assessee is required to deduct 8% from the sale price of the exempted goods for payment of 8% or otherwise. Shri Rajesh Ostwal, Ld. Counsel appearing for the appellant submits that on identical issue the Tribunal in their own case reported in Mahindra & Mahindra Ltd : 2007 (211) ELT 481 decided the matter against them. However, before t
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he Hon'ble High Court of Bombay which has been admitted and pending as reported in CCE vs. Mahindra & Mahindra Ltd. 2015 (320) ELT A188. Therefore, he prayed to keep this matter in abeyance. He fairly submits that the issue otherwise decided by the Larger Bench against the appellant in the case of Kriti Industries (I) Ltd : 2017 (350) ELT 257 (Tri-LB). As regards penalty imposed for the equal amount of demand under Rule 13 of Cenvat Credit Rules, 2004, he submits that the appellant had informed department regarding the deduction of 8% for purpose of payment of 8% under Rule 6 (3)(b). They also submitted the monthly ER-1 return wherein valuation of exempted goods and payment of 8% has been disclosed. The demand is within the normal period. Since no suppression of fact on the part of the appellant, there was no malafide. The issue is limited to the method of calculation of payment of 8%. The appellant undisputedly paid the 8% but only after deduction of 8% considering the same as tax. Therefore the issue involved is of interpretation of valuation for the purpose of Rule 6(3)(b). The issue was also referred to the Larger Bench and the matter was decided in Kirti Industries (I) Ltd. (supra). Taking all these facts, malafide intention on the part of the appellant is not established. Therefore penalty under Rule 13 was wrongly imposed. He also took support from the decision of their own case in : 2007 (211) ELT 481. In the said judgment also, the Tribunal set aside the penalty.
2. Shri S.V. Nair, Ld. AC (AR) appearing on behalf of the revenue reiterates the finding of the impugned order.
3. We have carefully considered the submission of both sides and perused the records.
4. We find that the issue involved in the present case has been decided by the Larger Bench in the case of Kriti Industries (I) Ltd. (supra). Accordingly, it was held that for the purpose of payment of 8% the same is not liable to be deducted from the sale price of the exempted goods. In view of this Larger Bench decision, the issue is no longer res integra.
5. As regarding the submission of the ld. Counsel for keeping the matter in abeyance, in the light of their appeal being pending in the Hon'ble High Court, we find that firstly, there is no stay of the Tribunal's order. Moreover, the issue stands settled by the Larger Bench. Therefore, there is no reason to keep the matter in abeyance. In view of the above position, the demand of cenvat credit confirmed by the original authority and upheld by the Commissioner (Appeals) is maintained along with interest. As regards penalty, we do agree with the submission of the ld. Counsel that firstly, the demand is within the normal period of limitation. The appellant regarding the method of calculation of 8% submitted a detailed note vide letter dated 05.08.2004. The appellant also filed the monthly ER-1 return wherein the fact of payment of 8% and valuation for the purpose has been declared. In view of this fact, there is absolutely no suppression of fact on the part of the appellant. The issue involved is of interpretation and is debatable. It was resolved by the Larger Bench in Kriti Industries (I) Ltd. (supra). It is a settled legal position that when there are conflicting views on the issue and the same is referred to the Larger Bench, it cannot be said that there is as a malafide on the part of the appellant. Having considered the fact and the settled legal position, we are of the considered view that appellant was not liable to penalty under Rule 13 of Cenvat Credit Rules, 2004. We therefore set aside the penalty. The impugned order stands modified to the above extent. The appeal is partly allowed in the above terms