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2010 DIGILAW 1118 (MP)

Bharat Heavy Electricals Ltd. v. Union of India

2010-11-09

K.K.LAHOTI, S.SHRIVASTAVA

body2010
ORDER 1. Heard. 2. This petition is directed against an order dt. 6-7-2010 passed by the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi in Case No. Central Excise Appeal E/1205/2009-EX[DB] by which the Tribunal declined to grant stay of demand of interest from the Petitioner on account of fixation of the assessment under Rule 7(4) of the Central Excise Rules 2002. 3. The appeal is still pending for consideration before the Tribunal and this matter has traveled before this Court assailing the aforesaid interlocutory order. 4. Facts of the case are that the Petitioner M/s. Bharat Heavy Electricals Ltd. is a Govt. organization manufacturing various electrical equipments. The Petitioner supplied aforesaid equipments to the Indian Railways. In the present case dispute is in respect of payment of interest on the amount of excise duty in respect of electrical equipments supplied by the Petitioner to the Indian Railways. 5. The case of the Petitioner is that though the equipments were manufactured by the Petitioner, but, the price was finalized by the Indian Railways. At the time when the equipments were manufactured and dispatched from the factory premises of the Petitioner, the price of such equipments was not ascertained and on the basis of provisional price the excise duty was paid. Thus immediately when the price was ascertained/settled by the Indian Railways, immediately remaining excise duty on the aforesaid ascertained price was paid to the department. That the entire amount of excise duty has been paid, but, the Respondent department is demanding interest on the amount of excise duty which was paid later on, from the date when the equipments were dispatched from the premises of the Petitioner company till the payment of excise duty to the Respondent. It is submitted by the Petitioner that immediately within a period of 30 days from the date when price was ascertained by the Indian Railways entire excise duty was paid, so the Petitioner is not liable for the payment of interest. 6. Shri Kishor Shrivastava, learned Counsel appearing on behalf of the Petitioner submitted that the interest becomes payable under Rule 7(4) of the Central Excise Rules, 2002 if the excise duty is not paid within a period of 30 days from the date of demand, but, in the present case the excise duty was paid immediately after the ascertainment of the price by the Indian Railways. It is submitted that prima facie a case was made out before the Tribunal for grant of exemption of the amount of interest which was claimed by the department. 7. Shri S.A. Dharmadhikari, learned Counsel appearing for the Respondent opposed the aforesaid contention vehemently and submitted that the Petitioner could not make out a case for undue hardship in respect of payment of aforesaid amount. The amount of interest is also payable as an excise duty and was recoverable from the Petitioner. That the aforesaid difference of duty was payable under Sub-section 2(b) of Section of the Excise Act, so the payment of interest was attracted and Petitioner was rightly held liable for payment of interest. 8. As the matter is Sub-justice before the Customs Excise & Service Tax Appellate Tribunal, we restrict ourselves to determine the aforesaid issue as matter has to be decided by the Tribunal after hearing both the parties. At present the only question for consideration before this Court is whether the Petitioner is entitled for stay/exemption from deposit of the amount of excise which is in fact an amount of interest payable on the excise duty for maintainability of the appeal before the Tribunal. 9. After hearing both the parties and considering the peculiar facts of the case, we find that prima facie a case has been made out by the Petitioner for grant of stay in respect of recovery of interest from the Petitioner on account of finalization of the assessment under Rule 7(4) of the Central Excise Rules, 2002. In view of the aforesaid, without making any comments on merits of the case, we direct: (1) Petitioner to deposit 25% of the due amount within a period of 30 days from today in the department and to file receipt thereof before the Tribunal; (2) Tribunal on filing of the aforesaid receipt shall proceed to hear the matter on merits and shall make an endeavour to decide the matter expeditiously as far as possible within a period of 90 days from the date of communication of this order, in accordance with law. 10. This petition stands disposed of. There shall be no order as to costs.