Pradeep Jain - Chartered Accountant

PJ/Case Laws/2010-11/26

CASE LAWS

Prepared By:

Sukhvinder Kaur, LLB [FYIC],

CA Rajani Thanvi and

Manish Mehta

Central Excise Section:

Case: Kingsley Industries Ltd v/s Supt of Central Excise

Citation: 2010 (101) RLTONLINE 77 (Cal)

Issue: - Whether export to Nepal is to be treated as clearance under the Central Excise Act? Whether the exemption announced under that Act is applicable to clearance to Nepal?

Brief Facts: - The petitioner is an exporter and was exporting the parts of machine to jute mills in Nepal. Petitioner availed exemption from central excise duty and was granted such exemption for the exports made during exports from April, 2003 to August, 2007. However, Department vide letter dated 07.09.2007 declared that the petitioner was not entitled to the benefit of exemption under Notification No. 6/2002-CE dated 01.03.2006 as it was restricted to home consumption only. But the exemption was not available on clearing the goods at nil rate of duty for export to Nepal, Bhutan or any other country.

Reasoning of the Judgment: - The High Court held that According to Notification No. 8/2003-C.E. dated 1-3-03 it was provided that clearance for home consumption shall include clearances for export to Bhutan and Nepal. Further the Board Circular specifying the procedure for export to Nepal also clarified that the goods exported to Nepal were to be assessed to duty in the same manner as the goods for home consumption.

Accordingly, the High Court held that export to Nepal is to be treated as a central excise home consumption clearance. It was held that the Exemption Notification granted exemption to the goods required by a jute mill for making jute textiles are exempted from central excise duty on fulfillment of Condition that the exemption would be allowed if a central excise officer of a particular rank is satisfied that the exports are meant for a jute mill for making jute textiles.

Therefore, it was held that the impugned order was erroneous. Direction given by the High Court to the concerned Revenue Authority to permit the writ petitioner to export parts of machine and other goods required by a jute mill for making jute textiles, to Nepal upon satisfaction of the officer concerned of Condition prescribed in the Exemption Notification.

Decision: - Writ petition allowed.

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Case: Bal Kishan Agarwal Glass Inds. Ltd. v/s Commissioner of Central Excise, Kanpur

Citation: 2010 (256) E.L.T. 775 (Tri. – Del.)

Issue: - Whether claim for remission of duty will be allowed in case were the goods have been destroyed due to unavoidable circumstances?

Brief Facts: - Appellant are manufacturers of glass and glassware. They were availing Cenvat credit on the input used in or in relation to manufacturing of final product. Due to heavy rain on Sep.06, 2003, some tableware/kitchenware was damaged. Appellant claimed remission of duty. Department rejected application of remission on the grounds that claim was submitted belatedly on 23.10.2003, the appellant had failed to take precaution to safeguard their goods to avoid the incident and the case did not fall under the category of unavoidable accident or natural cause. Further the appellant had also not followed proper procedure and neither they have reversed the cenvat credit taken on inputs which were damaged nor they have paid the excise duty on the finished goods which were made from that damaged inputs.

Against the rejection order, appellant has filed appeal.

Appellant’s Contention: - Appellate argued that they had taken reasonable precaution. The delay in informing the Department was due to the fact that after clearance of water from the premises, they did the taking of stock and correlated the same with the statutory records which took a long time. As soon as they had tallied the record, they informed the Department. It was contended that the finished goods had been entered in RG1 register but not cleared, so the question of duty liability did not arise. But to reverse to RG1 register, it required remission permission. It was submitted that the heavy rain was beyond the control of appellate. So the allegation that they did not take due precaution to safeguard their goods, was not sustainable. Reliance was placed on the judgment given in Sika Qualcrate Ltd. v/s CCE, Kolkata III [2008 (227) E.L.T. 405 (Tri. - Kolkata)] wherein the appellant had filed remission application after 3 months (appro.). In that case, the Tribunal has held that “Remission claim filed by the appellant is justifiable”. Appellant further relied on Kisan Sahkari Chini Mills Ltd. v/s Meerut [2008 (222) E.L.T. 540 (Tri. – Del)].

It was contended that nobody invites any event which destroys their goods etc. so it is “unavoidable circumstance”.

Reasoning of the Judgment: - The Tribunal held that the Commissioner had held that appellate had taken precaution to safeguard their goods but it was not appreciated that heavy rain took place on that day and did not point out what kind of precautions were required to be taken by the appellant. It is also not specified by the Commissioner what was lacking in the appellants measures safeguarding the goods. The appellate had filed remission claim after verification of actual stocks with statutory record which found destroyed due to heavy rain. The claim filed by the appellant was not late. Appellant had to claim insurance from the insurance company and duty was not claimed from the insurance company. From records, it was clear that the goods were entered into RG-1 but the same were not cleared from the factory premises therefore, the question of payment of duty did not arise at all. Moreover, it was not disputed that input were not used in the manufacture of finished goods, cenvat credit was available to the appellant. The judgment given in Kisan Sahkari Chini Mills Ltd. v/s Meerut was clearly applicable to the facts of the present case. It was held that it cannot be said that the appellant was negligent in safeguarding their goods and nobody would invite rain to destroy their goods. Impugned order set aside as it has not merit.

Decision: - Appeal allowed with consequential relief.

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Case: National Leather Cloth Manufacturing Co. Ltd v/s Union of India

Citation: 2010 (100) RLTONLINE 90 (SC)

Issue: - Whether cost of packing of fabric in hessian cloth, which, according to the assessee, is not required for sale of their goods at the factory gate and is necessitated to protect the fabric from damage during the course of transportation to upcountry customers is includible in the assessable value of the coated fabric manufactured by the assessee for the purpose of levy of excise duty?

Brief Facts: - Appellant was engaged in manufacture of coated fabrics. Declaration of price of goods in the price list as required under Rule 173C of the Central Excise Rules, 1944 was made to the Revenue and which approved the same from time to time. Appellant filed revised price lists dated 12.11.1980 wherein it was indicated that the prices declared by them earlier contained certain post manufacturing expenses which was to be excluded while computing the value of the fabric for the purpose of assessment to excise duty. Claim was rejected on 07.01.1981. Thereafter, a consolidated refund claim was filed for the period from 13. 11.1977 to 12.11.1980 of excess duty paid on various elements of post manufacturing expenses.

One such deduction was the cost of material used for packing the final product. The appellant was selling his goods to the wholesalers at the factory gate only in polythene bags. But for their up-country customers, the appellant were further packing their goods in three rolls of Hessian cloth.

The Adjudicating Authority held that there was nothing special about the further packing in Hessian cloth and therefore its cost could not be excluded from the value of the fabric. The appellant had filed writ petition challenging the validity of the impugned order.

The High Court affirmed the order of the Adjudicating Authority. It was held that appellant had being uniformly using the Hessian cloth for all the delivery to the up-country customers, irrespective of any specific request, the use of hessian cloth as secondary packing has to be held to be normal packing which are offered to the wholesalers at the factory gate. Reliance was placed on the Apex Court judgment in Union of India v/s MRF [1995 (77) ELT 433] wherein it was held that the cost of the secondary packaging in which the goods are ordinarily sold to the wholesalers is liable to be included in the assessable value. The High Court accordingly held that the cost of such packing has to be included in the assessable value. Moreover, it was not the case of the appellant that the secondary packing is of a durable nature and is returned by the buyer to the appellant.

Aggrieved by this order, the appellant filed appeal before the Supreme Court.

Appellant’s Contentions: - Appellant contended that the High Court as well as the Adjudicating Authority failed to appreciate the distinction between the primary and the secondary packing. Reliance was placed on Union of India & Ors v/s Bombay Tyre International Ltd. & Ors. It was submitted that they normally packed the fabric in polythene cloths for the wholesalers buying the fabric at the factory gate. It was only in the case of up-country customers, that they were bundling of three such rolls in hessian cloth was an additional packing done at the request of up-country customers in order to protect the goods from damage and, therefore, the cost of such packing could not be included in the value of the cloth. It was secondary packing. Reliance was placed on Commissioner of Central Excise, Allahabad & Ors v/s Hindustan Safety Glass Works Ltd. & Ors and Commissioner of Central Excise, Calcutta v/s Hindustan National Glass & Industries Ltd.

Respondent’s Contentions: - Revenue contended that in view of the finding by the Adjudicating Authority, affirmed by the High Court to the effect that hessian cloth was the standard packing for the fabric for sale in the wholesale market, its cost was includible in the value of the goods in terms of Section 4 of the Act.

Reasoning of the Judgment: - The Apex Court held that Section 4 of the Act provides as to how the value of excisable goods is to be determined. The expression “value” has been extended to include the cost of packing. As per Section 4(4)(d)(i) of the Act, the cost of packing is to be included in working out the value of the goods, unless the packing is of a durable nature and is returnable by the buyer to the assessee. Explanation thereto enumerates various types of packing, of which cost has to be included in the value of the goods. It is evident that by including the cost of packing in the value of goods, the legislature has sought to extend the levy beyond the manufactured article itself and, therefore, the provision has to be strictly construed.

The Apex Court observed that the concept of “primary packing” and “secondary packing” was evolved by this Court in Bombay Tyre International Ltd. In that case it was held that the degree of secondary packing which is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate is the degree of packing whose cost can be included in the “value” of the article for the purpose of the excise levy.” Thus, the test laid down was that it is only the cost of packing ordinarily required for selling the goods in the course of wholesale trade to a wholesale buyer at the factory gate which would be includible in the value of the goods and not the cost of any additional or special packing.

The Apex Court further relied upon the case of Union of India & Ors v/s Godfrey Philips India Ltd wherein on the facts of the said case it was held that since the corrugated cartons were employed as secondary packing only for the purpose of avoiding damage or injury during transit and were not necessary for selling the cigarettes in the wholesale market at the factory gate, their cost was not to be included in the value of the cigarettes for the purpose of levy of excise duty.

Reliance was also placed on the judgment given in Geep Industrial Syndicate Ltd v/s Union of India Hindustan Safety Glass Works Ltd. It was held that the test is whether the packing is done in order to put the goods in a marketable condition. Another way of testing would be to see whether the goods are capable of reaching the market without the type of packing concerned. Each case would have to be decided on its own facts. It must also be remembered that Section 4(4)(d)(i) specifies that the cost of packing is includible when the packing is not of a durable nature and returnable to the buyer. Thus, the burden to show that the cost of packing is not includible is always on the assessee. Also under Section 4(a) the value is to be the normal price at which such goods are ordinarily sold in the course of wholesale trade for delivery at the time and place of removal.

Accordingly, the Apex Court held that in the present case the further packing of three rolls in hessian cloth was not in the course of normal delivery to the customers in the wholesale trade at the factory gate and was, therefore, not required to make the product marketable. The additional packing in the nature of a secondary packing was done for the purpose of convenience of the up-country customers in the transportation of the goods manufactured by the assessee. It was held that the cost of secondary packing in hessian cloth cannot be included in the value of the goods in terms of Section 4(4)(d)(i) of the Act for the purpose of assessment of excise duty. Impugned order set aside to the extent it relates to the said issue.

Decision: - Appeal partly allowed.

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Case: Commissioner of C. Ex. & Cus, Daman v/s Dhakad Metals Pvt Ltd

Citation: 2010 (257) ELT 535 (Guj)

Issue: - The issue involved in this case was that whether copper sludge arising out of manufacturing of zinc sulphate is a waste and scrap or it is excisable finished goods. Mere fact that the waste can be sold in the market whether becomes the test of marketability/excisability?

Brief facts: - Respondent-assessee was manufacturing zinc sulphate (Agriculture Grade) falling under heading 2833.00 attracting nil rate of duty. During the manufacturing activity, Copper Mud and Copper sludge were also produced. Respondent was clearing the Copper Mud and Copper sludge as waste, paring and scrap under heading 7404.90. Respondent did not pay any duty by availing the benefit of exemption under Notification dated 18.05.1995 which granted exemption from payment of whole of the duty of excise on the said waste, parings and scrap arising out of manufacturing of exempted goods.

Revenue contended that the copper mud and copper sludge which were sold in the factory were liable to excise duty.

In appeal before the Tribunal, reliance was placed in the judgment of the Apex Court in the case of Collector of Central Excise, Patna v/s Tata Iron & Steel Co. Ltd [2004 (165) ELT 386 (SC)] wherein it was held that merely selling does not mean that zinc dross and skimming were marketable commodity as even rubbish can be sold. Everything which is sold is not necessarily a marketable commodity known to commerce and which it may be worthwhile to trade in. With regard to marketability it was held that marketability means selling of a commodity known to the commerce and which may be worthwhile to trade in. The Tribunal also placed reliance on the case of Commissioner, Meerut v/s Titawi Sugar Complex [2003 (152) ELT 21 (SC)].

The Tribunal further held that the burden lies on the department to establish that the said items were marketable commodities but the Department had failed to produce any evidence to prove the said fact.

Against this decision, Revenue is in appeal before the High Court.

Appellate Contention: - Revenue contended that the Tribunal has not considered the fact that respondent was not entitled for exemption under the notification and they had cleared scrap of considerable value without payment of duty and without the cover of central excise invoice. It was contended that these items were sold in the open market after removal from factory and therefore the respondent was liable for penal action under Rule 25 as well as Section 11AB of the Central Excise Act, 1944. It was submitted that Section 11AB would apply where it is a case of clandestine removal by way of mis-statement or suppression of fact is not correct. As per the amendment, where the duty is short levied or short paid, the person is liable to pay as per sub-section (2) of Section 11A and in addition thereto is liable to pay the interest.

It was further submitted that there was a process and the duty was payable for the copper sludge in the market which has been disposed of as a waste. It was submitted that the Tribunal has failed to appreciate about the aspect of marketability of such waste arising in the course of manufacture of the finished goods. The said items cannot be said to be waste in the course of manufacture of the finished goods. The said items were sold regularly in the market.

Reasoning of the Judgment: - The High Court held that the process of manufacture was admittedly of zinc sulphate (Agriculture Grade) and the ultimate aim of the respondent-manufacturer was manufacture of zinc sulphate and not copper sludge. It was in the process of such manufacture of zinc sulphate that the waste like copper sludge arises and the same was not an excisable article. Accordingly, it was held that the submissions made by the Revenue were not acceptable.

With regard to the marketability of waste, the High Court held that this facet is also required to be considered in the background of the facts whether it is a different commodity which has taken shape after the process having a separate commercial identity as a product and the answer has to be in negative. Mere fact that even waste could be sold in the market or it could be dealt with in the market itself is not sufficient to come to the conclusion that it is different product having marketability. The marketability of the product as a result of the process is one aspect and the disposal of waste is another aspect.

Further, it was held that the Apex Court in the case of Collector of Central Excise, Patna v/s Tata Iron & Steel Co. Ltd has dealt with the same issue with regard to another by-product or waste like zinc sulphate and the marketability thereof and has therefore observed that it is not excisable merely because it could be sold or disposed of in a market. The High Court held that no interference required with the finding of facts given by Lower Authorities.

Decision: - Appeal dismissed.

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Case: I.T.C. Ltd. v/s Commissioner of C. Ex., Calcutta-IV

Citation: 2002 (147) E.L.T. 437 (Tri. - Kolkata)

Issue: - Whether cenvat credit can be denied to the manufacturer on the basis of invoice issued by registered dealer on the ground that he was entitled to issue the invoice but no action was taken against him?

Brief Facts: - Appellate has take Modvat credit on the basis of invoices issued by the registered dealer. Revenue sought to deny the credit to the appellant on the ground that the dealer was not entitled to issue invoice from registered godown as the original invoice issued by the manufacturer was in the name of the head office of the dealer instead of his godown address. This allegation was made by the Revenue on the basis of report received from jurisdictional Excise Authorities of the dealer.

Appellant’s Contentions: - The contention of the appellants is that no grounds or basis were spelt out in the said report. It is subsequently, on an effort being made by the appellants that the basis for denying Modvat was disclosed to them by the dealer.

It was submitted that no proceedings were initiated against the registered dealer. Therefore, the dealer’s invoice is regular in all respects is proper modvatable documents so far they are concerned. Reference is made to the judgment given in C.C.E., Jaipur v. Ashok Leyland [2001 (127) ELT 0804 (Tribunal)] and in Shrikrishna Rolling Mills Ltd. [2001 (129) ELT 0722 (Tribunal)].

Reasoning of the Judgment: - The Tribunal relied upon the cases of C.C.E., Jaipur v. Ashok Leyland and Shrikrishna Rolling Mills Ltd wherein it was held that credit taken on the invoice issued by the registered dealer is proper and the same cannot be denied on account of irregularity committed at the dealer’s end, especially when no action has been taken at the dealer’s end.

Accordingly, impugned orders were set aside.

Decision: - Appeal allowed with consequential relief.

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Service Tax Section

Case: Maheshwari Bajaj v/s Commissioner of Central Excise, Rajkot

Citation: 2010 (19) STR 905 (Tri-Ahmd)

Issue: - Whether the activity of providing space at the authorized service station to financial institutions on commission is covered under the category of Business Auxiliary Service?

Brief Facts: - Appellant was providing Business Auxiliary Service. During the period from 01.07.2003 to 31.03.2006, the appellant provided space at their authorized service station to various financial institutions such as ICICI, HDFC, Bajaj Auto Finance etc and were receiving incentive/commission from them for referring the clients to them.

Department issued show cause notice on 24.07.2008 invoking the longer period of limitation on the ground that the appellant had not taken registration under service tax nor had declared the value of service.

In appeal before the Commissioner (Appeal) it was held that non-declaring to the particulars to the Department amounted to suppression of facts to evade tax liability. Against this order, the appellant is in appeal before the Tribunal.

Appellant’s Contention: - Appellant have placed reliance on the Board Circular No. 87/05/2006-ST dated 06.11.06 wherein it was noted that there were certain doubts in respect of the activities undertaken by various motor vehicle dealers and service stations, the Board had observed that such promoting of market of financial institutions by the automobile dealers would be covered under BAS. It was contended that the Board itself had admitted that there was doubt about the applicability of service tax therefore; the benefit should be given to the appellant.

Reasoning of the Judgment: - The Tribunal held that from the Board Circular it was clear that there was doubt in the field with regard to the said activity being classified under BAS. The period of dispute was much earlier before the issuance of the said circular. Therefore, the demand is barred by limitation. Impugned order set aside.

Decision: - Appeal allowed with consequential relief.

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Case: Lanco Infratech Ltd v/s Commissioner of Service Tax, Hyderabad

Citation: 2010 (19) STR 906 (Tri-Bang)

Issue: - Whether the services of construction of reservoirs, canals, etc. provided to the Government in the form of turnkey projects can be categorized under the category of Works contract or under Turnkey projects including engineering procurement and construction or commissioning (EPC) projects.

Brief Facts: - Appellant has provided services to the Government of Andhra Pradesh in the form of turnkey projects executed by them for construction of reservoirs, canals, distributor system to feed various ayacut, land etc. Revenue held that the said activity will fall under the category of works contract and will be specifically fall under sub-clause (e) of Section 65 (25b) covering ‘Turnkey projects including engineering procurement and construction or commissioning (EPC) projects.

Appellant is before the Tribunal. Application for stay and waiver of pre-deposit of service with interest and penalty is filed.

Appellate Contention: - Appellant submitted that the activity rendered by them was in respect of irrigation system, right from investigating to the completion of the said system. It is claimed that the service rendered by them would fall under Commercial or Industrial Construction service but the same was exempted from tax liability as the activity was not commercial in nature. It is submitted that in the works contract, there was a clause which identified the activity of construction as activity for commercial or industrial purposes. Reliance was placed on Board Circular no. 116/10/2009-ST dated 15.09.2009 wherein it is clarified that work intended for commerce or industry will only be taxed and does not include the work or services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. The service provided by them was non-commercial in nature.

Appellant submitted that a co-ordinate bench in similar matter in the case of Radius Corporation Ltd v/s CCE, Raipur [2009 (14) STR 693 (Tri-Del)] has granted stay and unconditional waiver of pre-deposit.

Respondent’s Contention: - Revenue contended that the activity undertaken by the appellant was in the nature of works contract and will fall under the category of turnkey projects. The title of the agreement entered by the appellant with the Government of AP clearly indicated that it is a turnkey project and therefore liable to service tax.

Reasoning of the Judgment: - The Tribunal held that prima facie the service rendered by the appellant will be covered under works contract. However, from the definition of works contract under Section 65 (105) (zzzza) sub-clause (b) that construction for the purpose of commerce or industry is covered. The work executed by the appellant was in respect of irrigation services and is not for any commerce or industry. Reliance was placed on Board Circular dated 15.09.2009 wherein it was clarified that Section 65 (105) (zzzza) itself excludes works contract in respect of dams, road, airports, railways, transport terminals, bridges executed under EPC mode. Thus, works contract done in respect of these activities even if through EPC mode are exempt from service tax.

The Tribunal held that from the said Circular it was clear that the activities which were concerned for the welfare of the citizens of this country have been excluded from the liability of service tax.

Prima facie case made out for grant of stay and waiver of pre-deposit.

Decision: - Stay granted.

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Case: M/s Angel Industries Casting v/s CCE, Rajkot

Citation: 2010-TIOL-1298-CESTAT-AHM

Issue: - On which rate service tax will be payable whether it is the rate prevailing on the date of rendering of the service or the rate existing on the date of payment of service tax?

Brief Facts: - Appellant is engaged in providing the construction services. They rendered the service to one client in 2004-05. The consideration for the said service was received by the appellant subsequently in the year 2006-07. Appellants deposited the service tax by applying the rate of 10% as was applicable during 2004-05. Lower Authorities held that the appellant was required to pay the service tax on the rate of 12% as was in force during 2006-07.

Appellant have not contested the demand for differential service tax and paid the amount alongwith interest. Appeal before the Commissioner (Appeal) was dismissed for non-compliance with the stay order directing appellant to deposit Rs. 50, 000/-.

Appellant is in appeal against the levy of penalty. Application for stay and waiver of pre-deposit is filed.

Appellate Contention: - Appellant has relied upon the order of the Tribunal in the case of Reliance Industries Ltd [2008 (10) STR 243 (Tri-Ahmd)] and contended that the rate of tax on the date of rendering the service is applicable as against the rate of tax applicable on the date of payment of tax.

With regard to penalty imposed under Section 76 it was submitted that the said Section provided for maximum penalty equal to the service tax confirmed. The amount of differential duty was Rs. 19, 520/- but the penalty imposed in Rd. 1, 38, 197/-.

Reasoning of the Judgment: - The Tribunal held that in view of the law laid down in the case of Reliance Industries Ltd, no penalty was imposable on the appellant. As the appellant has already deposited the service with interest, the condition of pre-deposit of penalty amount is dispensed with. Accordingly, the impugned order of the Commissioner (Appeal) dismissing the appeal of the appellant is set aside. Matter remanded for fresh consideration without insisting for any pre-deposit.

Decision: - Stay petition and appeal disposed off accordingly.

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Case: Commissioner of Central Excise, (LTU) Chennai v/s M/s Turbo Energy Ltd

Citation: 2010-TIOL-1310-CESTAT-MAD

Brief Facts – cum - Issue: - The issue involved in this appeal was regarding the admissibility of credit of service tax paid on the services of

(i) Air/Rail ticket booking

(ii) Insurance/Mediclaim/Contrators policy

(iii) Vehicle maintenance

(iv) Security Services

The appeal is filed by the Revenue against the impugned order of the Lower Authorities.

Reasoning of the Judgment: - The Tribunal held that credit was admissible on the services mentioned hereinabove. It was held that in the case of Fine Care Biosystems [2009 (16) STR 701 (Tri-Ahmd)] wherein the credit was held admissible of tax paid on Air/Rail ticket booking.

Reliance was placed on the cases of Beekay Engg & castings Ltd [2009 (16) STR 709 (Tri-Bang)] and CCL Products (India) Ltd [2009 (16) STR 305 (Tri-Bang)] wherein credit of tax paid on Insurance/Mediclaim/Contractors policy were held admissible.

With regard to credit of tax paid on Vehicle maintenance reliance was placed on J. K. Cement Works [2009 (14) STR 538 (Tri-Del)]. And reliance was placed on Hindustan Coca-Cola Beverages Pvt Ltd [2010-TIOL-160-CESTAT-Bang] & [2010-TIOL-813-CESTAT-BANG] wherein it was held that credit was admissible of service tax paid on security services.

Impugned orders upheld.

Decision: - Appeals rejected. Cross-objections dismissed.

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Customs Section

Case: M/s Kiran Pondy Chems Ltd & Another v/s Commissioner of Customs, Tuticorin

Citation: 2010-TIOL-1297-CESTAT-MAD

Issue: - Whether interest is payable on goods cleared under DEPB scheme from a warehouse after 90 days?

Brief Facts: - Goods cleared under DEPB scheme from warehouse after 90 days period. Revenue demanded interest. Matter before the Tribunal.

Reasoning of the Judgment: - The Tribunal held that the issue was already decided against the appellant by the Apex Court in the judgment given in the case of Tanfac Industries Ltd v/s Commissioner [2009 (244) ELT A 121 (SC)] wherein the judgment of the High Court reported at 2009 (240) ELT 341 (Mad) was upheld. It was held in that judgment that the goods cleared under DEPB scheme cannot be treated as exempted and are duty paid goods and hence, interest is payable on them, if the same are cleared from the warehouse beyond the 90 days period as per Section 61 of the Customs Act, 1962. The contention of the Appellant-exporter that the payment by debit in DEPB scheme was not a cash payment but an exemption and hence interest was not payable on non-existent duty, was rejected. Accordingly, the Tribunal in the present case has upheld the order of the Lower Appellate Authority.

Decision: - Appeals rejected.

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