Central Excise Appeal No. 27 of 2014. Case: Madhukar Sahakari Sakhar Karkhana Ltd. Vs Union of India. Bombay High Court

Case Number:Central Excise Appeal No. 27 of 2014
Party Name:Madhukar Sahakari Sakhar Karkhana Ltd. Vs Union of India
Counsel:For Appellant: Shri S.M. Godsay, Advocate. and For Respondent: Shri S.B. Deshpande, ASG and Alok Sharma, SC.
Judges:A.V. Nirgude and V.L. Achliya, JJ.
Issue:Central Excise Act, 1944 - Sections 4, 11AA
Citation:2015 (324) ELT 49 (Bom)
Judgement Date:November 11, 2014
Court:Bombay High Court
 
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Order:

  1. This is fourth round of litigation on the question as to whether appellant is liable to pay additional excise duty on goods sold. The facts are not in dispute. It is admitted that appellant manufactured sugar and as per direction of Central Government, they were under obligation to sell to the Government part of the sugar stock as levy sugar. Excise duty payable on such sugar was less. Even the price the Government paid to the appellant on such sugar was less. The Directorate of Sugar, New Delhi release order dated 30-9-97 and 27-10-97. As per the same, the appellant cleared 15681 Quintal sugar from their stock of levy sugar and paid central excise duty at the rate of Rs. 52/per quintal (that was the rate applicable then). Subsequently, Government treated this sale as free sugar sale whereby the Government admitted its liability to pay more amount to the appellant. Appellant received additional consideration in 1999 but appellant did not pay additional excise duty. It is in 2002 for the first time, the department issued show cause notice demanding the difference of excise duty. All along, before all the authorities, it was held that the appellant was liable to pay the difference of excise duty. The authorities below also held that the appellant was under obligation to pay interest on such amount. At one stage the appellant was even charged with penalty u/s 11AC of Central Excise Act, 1944 but ultimately the Customs, Excise and Service Tax Appellate Tribunal held that the appellant was not liable to pay penalty. Apparently, this gave substantive relief to the appellant and yet this appeal is filed.

  2. The question is whether there is any substantial question of law arising in this appeal. Learned counsel for the appellant raised two points for urging the Court that these points would give rise to substantial questions of law. The first point he raised is as follows:

  3. According to him, once appellant sold and delivered sugar as levy sugar and once excise duty was paid at that time, appellant''s liability towards excise duty came to an end. He placed reliance on Section 4 of Central Excise Act, 1944 for making this submission. Section 4 reads as under:

    "Section 4. Valuation of excisable goods for purposes of charging of duty of excise. - (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then on each removal of the goods, such value shall -

    (a) in a case where the goods are sold by the assessee,...

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