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Jai Balaji Industries Limited v. Commissioner Of Central Excise, Bolpur .
Judgment Summary — Ashok Jindal (Central Excise appeals)
Factual and Procedural Background
The appellant is a manufacturer operating multiple units producing iron and steel products (including sponge iron, pig iron, silico‑manganese, ferro alloys, MS ingots, billets, bars/rods, rounds and TMT bars). Some finished products of one unit served as inputs for other units and were captively consumed. The units cleared goods to independent buyers at factory gate and also effected stock transfers to sister units.
For sales to independent buyers the appellant paid duty on transaction value under Section 4(1)(a) of the Central Excise Act, 1944. For stock transfers between units, the appellant generally followed Rule 4 of the Central Excise Valuation Rules, 2000 (valuing transfers on the basis of values at which sales were made to independent buyers). However, for one unit (G-1, Mangalpur, Raniganj) during 2006‑07 to 2008‑09 the appellant started assessing stock transfers on the basis of 110% of cost of production as per CAS‑4 under Rule 8 of the Valuation Rules; this change produced additional duty liabilities. The appellant issued supplementary invoices and paid additional duty; sister units availed CENVAT credit of the differential duty; no interest was paid on these payments.
For other units, during April 2007 to June 2010, the appellant at times paid differential duty after delay (while determining the value of the largest aggregate quantity cleared to independent buyers) and again did not pay interest. Revenue issued in total 12 show cause notices (SCNs) seeking interest on the differential duty for the intervening periods and confirmed interest and penalties in orders‑in‑original; the appellant contested the demands and appealed to the Tribunal (CESTAT). A chart listing the 12 matters (SCN numbers, periods, duty and interest amounts, products and invoked valuation rules) was placed on record and forms the basis of the several appeals consolidated in the opinion.
Legal Issues Presented
- Whether, for stock transfers to sister units where the manufacturer also makes sales to independent buyers, the value for central excise purposes is to be determined under Rule 8 (110% of cost as per CAS‑4) or can be the same value as sales to independent buyers (Rule 4 approach) — i.e., whether Rule 8 liability arises in such circumstances.
- Whether interest is payable on differential duty that the appellant paid (either voluntarily or belatedly) in respect of stock transfers when the differential duty is revenue‑neutral because sister units availed CENVAT credit.
- Whether demands for interest (and related penalties) are time‑barred or otherwise not exigible where there was no misstatement or suppression by the appellant and some duty payments were voluntary or occurred after limitation.
Arguments of the Parties
Appellant's Arguments
- The appellant submitted that where the manufacturer cleared identical goods both to independent buyers at factory gate and to sister units for captive consumption, the stock transfers should be assessed at the same value as sales to independent buyers (relying on the Larger Bench decision in Ispat Industries Ltd. v. Commissioner of C.Ex.).
- Where differential duty was paid and subsequently availed as CENVAT credit by the sister unit, it is a revenue‑neutral transaction; invoking the Larger Bench decision in Jay/Yuhshin Ltd. (Tribunal‑LB), the appellant argued that revenue neutrality means no interest should be payable.
- The appellant contended that certain demands are time‑barred because there was no misstatement or suppression of facts by it; extended limitation under Section 11A could not be invoked. The appellant also argued that if any change in valuation practice was voluntarily adopted, the department cannot compel perpetuation of an allegedly incorrect position and that the net effect was revenue neutral.
- The appellant prayed for setting aside the impugned orders insofar as they demand interest and impose penalties.
Revenue's Arguments
- The Department's representative (Ld. AR) submitted that when duty is paid on supplementary invoices, interest becomes payable on the differential duty and the demand for interest was rightly confirmed by the adjudicating authority.
- To support that position, the Department relied on the Tribunal decision in Indoworth (India) Ltd. v. CC & CE, Nagpur [2011 (22) STR 197 (Tri.‑Mumbai)] (a decision which was affirmed by the Bombay High Court as reported in 2012 (27) STR 3 (Bom.)).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court (as stated in the opinion) |
|---|---|---|
| Ispat Industries Ltd. v. Commissioner of C.Ex., Raigad [(2007) 209 ELT 185 (Tri.‑LB)] | Supports the proposition that stock transfers to sister concerns for captive consumption may be assessed at the same value as sales to independent buyers (valuation parity). | Noted as relied upon by the appellant to argue that stock transfers should be valued at the same rate as sales to independent buyers; cited in appellant's submissions. |
| Jay Yuhshin Ltd. v. CCE, New Delhi [(2000) 119 ELT 718 (Tribunal‑LB)] (also referenced as "Jai Yuhshin Ltd.") | Sets out principles for determining "revenue neutrality" (including that revenue neutrality is a question of fact, misuse of scheme is distinguishable from mere deviation, and credit must be available to the assessee himself). | The appellant relied on this Larger Bench decision to argue revenue neutrality where CENVAT credit was availed by sister units; the Tribunal applied its principles in concluding that appeals concerning inter‑unit transfers (Sl. No. 2‑12) involved a revenue‑neutral situation. |
| Indoworth (India) Ltd. v. CC & CE, Nagpur [2011 (22) STR 197 (Tri.‑Mumbai); affirmed 2012 (27) STR 3 (Bom.)] | Authority relied upon by Revenue for the proposition that interest is payable when duty is paid on supplementary invoices (context involved refund of interest on Service Tax in that decision as described by the parties). | Relied on by Revenue's counsel. The Tribunal distinguished this authority on facts, stating it was not applicable to the present case because Indoworth concerned refund of interest paid on Service Tax which was not payable by the assessee; thus it did not govern the present facts on revenue neutrality and interest liability. |
| C.C.E. & C., Vadodara‑II v. Gujarat Narmada Fertilizers Co. Ltd. [(2012) 285 ELT 336 (Guj.)] | Holds that where a payment of duty is made voluntarily after the limitation period has expired and extended period is not available, such voluntary payment cannot be treated as payment under subsection (2B) of Section 11A so as to attract interest; it would be anomalous to saddle a taxpayer with statutory interest in such circumstances. | The Tribunal quoted this High Court decision and applied its reasoning to Appeal No. E/552/2011 (Sl. No. 1) to hold that because differential duty was not payable under Rule 8 and any payment was voluntary after limitation, no interest could be levied. |
| Vadodara‑II v. Indeos Abs Ltd. [(2010) 254 ELT 628 (Guj.)] | Holds that where goods are cleared to a sister concern which avails Modvat/Cenvat credit, the overall exercise can be revenue neutral. | The Tribunal relied on this decision to support the conclusion that where the appellant paid differential duty that was subsequently availed by the sister unit as CENVAT credit, the situation was revenue neutral and interest did not arise for the appeals at Sl. No. 2‑12. |
| International Auto Products (P) Ltd. (referred to in the Jay Yuhshin LB reasoning) | Proposition (endorsed in Jay Yuhshin LB) that once an assessee has chosen to pay duty, he has to take all consequences of payment of duty. | Appears in the Larger Bench reasoning quoted by the Tribunal; the Tribunal referenced the Jay Yuhshin conclusions (which endorse this proposition) in its assessment of revenue neutrality, while also applying the facts to find revenue neutrality in the present case. |
Court's Reasoning and Analysis
The Tribunal proceeded by separating the issues arising in the appeals listed at Sl. No. 1 and those at Sl. No. 2‑12 and applied legal principles and precedent to each group.
Step 1 — Facts and valuation practice: The Tribunal accepted the factual matrix that the appellant cleared goods both to independent buyers and to sister units; for one unit (Sl. No. 1) the appellant had adopted valuation under Rule 8 (110% of CAS‑4) and paid differential duty by issuing supplementary invoices; in other matters (Sl. No. 2‑12) differential duty was paid belatedly after ascertaining values and without payment of interest.
Step 2 — Whether Rule 8 liability arose for Sl. No. 1: The Tribunal considered whether Rule 8 applied where identical goods were sold to independent buyers as well as to sister units. It held that Rule 8 did not apply in the facts of Sl. No. 1 — i.e., the appellant was not liable to pay duty under Rule 8 when sales to independent buyers at factory gate occurred for the same goods. Thus, the differential duty sought to be recovered under Rule 8 was not payable.
Step 3 — Interest on voluntary or belated payments (Sl. No. 1): Having found no liability under Rule 8, the Tribunal addressed whether interest could be levied on the differential duty paid by the appellant. It relied on the Gujarat High Court decision in CCE & C, Vadodara‑II v. Gujarat Narmada Fertilizers Co. Ltd., which reasoned that if an SCN would have been time‑barred and any payment of duty was voluntary after limitation, such a voluntary payment cannot be characterized as falling under subsection (2B) of Section 11A so as to attract interest. Applying that reasoning, the Tribunal held that interest was not payable in Appeal No. E/552/2011 (Sl. No. 1) and set aside the impugned order with consequential relief.
Step 4 — Revenue neutrality and Sl. No. 2‑12: For the appeals at Sl. No. 2‑12 the Tribunal examined whether payments of differential duty (which were later availed as CENVAT credit by sister units) created a revenue‑neutral situation. The Tribunal applied the Larger Bench principles set out in Jay Yuhshin Ltd. (emphasizing that revenue neutrality is a question of fact, misuse differs from mere deviation, and credit must be available to the assessee himself) and the Gujarat High Court decision in Vadodara‑II v. Indeos Abs Ltd. (stating that clearance to a sister concern availing Modvat/Cenvat credit renders the exercise revenue neutral).
Concluding that the facts established revenue neutrality — i.e., the differential duty paid was effectively neutral because it was availed as CENVAT credit by the sister units — the Tribunal held that no duty was properly payable and therefore no interest could be demanded in these appeals. The Tribunal also considered and distinguished the Indoworth authority relied upon by Revenue, noting that Indoworth related to a different factual and legal context (refund of interest on Service Tax) and was not applicable to the facts at hand.
Step 5 — Resultant order: On the combined application of the above reasoning, the Tribunal allowed the appeal at Sl. No. 1 (E/552/2011) by setting aside the order insofar as interest was demanded, and similarly allowed the appeals at Sl. No. 2‑12, setting aside the impugned orders relating to interest and penalties and granting consequential relief.
Holding and Implications
Core Ruling: ALL APPEALS ALLOWED.
Direct consequences for the parties:
- The impugned orders confirming interest (and related penalties) are set aside in respect of all the appeals considered (Sl. No. 1 through Sl. No. 12 in the chart).
- In Appeal No. E/552/2011 (Sl. No. 1) the Tribunal held that Rule 8 valuation was not applicable where the appellant cleared identical goods to independent buyers and therefore no differential duty under Rule 8 was payable; accordingly, interest on such differential duty was not exigible.
- For appeals numbered Sl. No. 2‑12 the Tribunal held the facts amounted to a revenue‑neutral situation (differential duty paid was availed as CENVAT credit by sister units) and therefore interest was not payable; the impugned orders were set aside and consequential relief granted.
Broader implications: The Tribunal applied and followed existing precedents (including Larger Bench principles on revenue neutrality and Gujarat High Court decisions on voluntary payments after limitation) to resolve these factual matrices. The opinion decides these appeals on their facts and does not purport to create a new legal principle beyond the application of those authorities.
Ashok Jindal:— The Appellant is a manufacturer of iron and steel products namely Sponge Iron, Pig Iron, Silico Manganese, Ferro Manganese, Ferro Silicon, MS ingots, Billets, Steel Bars/Rods, MS Rounds and TMT bars and have 5 different units. In some of the cases, finished products of one unit is input for another unit and it has been captively consumed. All the units of the Appellant sell their finished goods to independent buyers at factory gate and also stock transfer to their sister units. In respect of sales of independent buyers, the appellant was paying duty on transaction value in terms of Section 4(1)(a) of the Central Excise Act, 1944. In respect of finished goods which were transferred to their other units, the appellant were paying duty on the value on which sales were made to independent buyers in terms of Rule 4 of Central Excise Valuation Rules, 2000. However, the appellant during the period 2006-2007 to 2008-2009 in respect of unit located at G-1, Mangalpur Industrial Estate, Bakhtiarnagar, Raniganj-713321, West Bengal started paying duty on stock transfer on the basis of 110% of the cost of production determined as per CAS-4 in terms of Rule 8 of Valuation Rules, 2000. The adoption of a different system of valuation in respect of stock transfer resulted in the appellants being required to pay additional duty. The appellant paid the additional duty by issuing supplementary invoices in the name of other units who took CENVAT Credit of the differential duty paid by the said unit. But no interest was paid.
2. In respect of other units, the appellant during the period April 2007 to June 2010 were paying duty in respect of stock transfers on the basis of Rule 4 of the Valuation Rules, but in these cases Revenue did not insist the payment of duty in accordance with Rule 8 i.e. 110% of the cost of production as per CAS-4. However, the payment of duty in respect of such stock transfers was delayed by the appellant as determining the value of the largest aggregate quantity of the identical goods cleared to independent buyers took some time. But no interest was paid.
3. In respect of unit located at Lenin Sarani, Dist : Burdwan, Durgapur-713210 the demand of differential duty in accordance with Rule 8 of the Valuation Rules, 2000 was necessitated because of belated increase in the cost of raw materials and also because there were no sales of the same goods to independent buyers at the factory gate. This differential duty was paid by the appellant even before issuance of show cause notice. But no interest was paid.
4. The Revenue is of the view that in all the cases where either supplementary invoices has been issued or payment of duty has been paid with a delay on their stock transfers, the appellant is liable to pay interest on the said differential duty for the intervening period. During the whole period total 12 show cause notices were issued to the appellant for demand of interest for the intervening period. Although in reply to the show cause notices the appellant contested even payment of duty, but the demand of interest was confirmed and penalties were also imposed. Against the said orders, the appellant is in appeals.
5. For better appreciation of the facts and details of the appeals, a chart is prepared which is as under:—
Sl. No Unit SCN No.& Date O.I.O No.& Date O.I.A No. & Date Appeal No. before CESTAT Period involved Amount of Duty Involved (RS) Amount of Interest (Rs) Product involved Valuation Rule Invoked in the SCN 1 I 44/commr/Bol/10dt.10.9.10 19/Commr/B ol/11Dt. 18.03.11 NA Appeal No. E/552/2011 2006-2007 to 2008-2009 6,42,88,625 1,26,23, 235/- Sponge Iron, Ferro/S ilico manug anese, Pig Iron 8 2 I O 6/ADC/BOL/10 dt. 16.09.10 13/ADC/BOL/11Dt. 24.01.11 OIA No. 81/Bol/2011 Dt.15.09.11 Appeal No. E/854/201 1 2009-2010 24,10,389 Not quanified Sponge Iron, Ferro manga nese, sil ico 4 3 II 5/2010-11 dt.04.05.10 11/DC/JBI(U-II) DGP-I/10-11Dt.24.10.2010 OIA No. 128/Bol/201 1 Dt.15.09.11 Appeal No. E/976/201 1 Apr'09 to June 09 2,05,757 Not quantifie d M S Billets 4 4 II 12/2010-11 dt. 30.08.10 05/AC/DGP-I/11-12Dt.04.08.2011 OIA No. 47/Bol/2012 Dt.24.02.12 Appeal No. E/289/201 2 Aug ‘09& sep'09 17,898 Not quantifie d MS Billets 4 5 II 17/AC/DGP-I/2010-11 Dt. 13.10.10 04/AC/DGP I/2010-11dt.13.101 0 04/AC/DGP-I/11-12 Dt. 12.07.2011 OIA No. 51/bol/2012 Dt. 24.02.12 Appeal No. E/293/2012 2009-2010 5895/- Not quantifi ed/Non-alloy steel Ingots 8 6 III 46/ADC/BOL/10 dt.09.12.10 106/ADC/Bol/11 Dt. 13.07.2011 OIA No. 135/Bol/2012Dt.23.0 5.12 Appeal No. E/543/201 2 2007-2008 57,44,419/- 8,47,164/- Pig Iron 4 7 III 40/JC/BOL/10 dt. 18 94/JC/Bol/1 0 Dt.08.10.2010 OIA 89/BOL/201 1 Dt. 13.07.11 Appeal no. E/853/201 2 April'09 to Sep'09 21,03,511 Not quantifie d Pig Iron, M.S. Billets, F erro waste and scrap& Alloy Billet 4 8. III 13/2010-11 dt.01.11.10 05/AC-05/JBIL/R-4/DGP-II/11-12 Dt.21.06.2011 OIA No. 50/Bol/2012 Dt.24.02.12 Appeal No. E/290/2012 Oct'09 to Dec'09 77,235/- Not quantifie d Pig Iron, MS Billet & Alloy Billet 4 9. III 43/ADC/BOL/1 0 dt.03.12.10 107/ADC/Bol/11 Dt.13.07.2011 OIA No. 48/Bol/2012 Dt.24.02.12 Appeal No. E/292/2012 Jan'10 to March'1 0 8,61,673/- Not quantifie d Pig Iron, MS Billet, Alloy Billet & Non-Alloy Billet 4 10 IV 14/2010-11 dt.03.11.10 08/AC-08/JBIL (U-IV)R-4/DGP-II/11-12 Dt.24.08.2011 OIA No. 49/Bol/2012 Dt.24.02.12 Appeal No. E/291/2012 Oct'09 to Dec'09 4,91,707/- Not quantifie d Silico Mangan ese, TMT Bar & Sponge Iron 4 11 IV 19/2010-11 dt. 18.01.10 10/AC-10/JBIL (U-IV)R-4/DGP-II/11-12 Dt. 12.10.2011 OIA No. 137/Bol/2012 Dt.23.05.12 Appeal No. E/545/2012 Jan.' 10 to Mar.' 10 2,39,084 Not quantifie d Silico Mangan ese, TMT Bar & Sponge Iron 4 12 IV 05/2011-12 Dt.09.05.11 15/AC-15/JBIL (U-IV)/R-4/DGP-II/11-12 Dt.12.10.2011 OIA No. 138/Bol/2012 Dt.23.05.12 Appeal No. E/542/2012 April' 10 to June' 10 2,45,463/- Not quantifie d Silico Mangan ese, TMT Bar & Pig Iron 4
6. With regard to Appeal No. E/552/2011, it is the submission of the Ld. Counsel that Appellant was clearing goods to independent buyers at factory gate and also selling the goods to their sister concern for captive consumption therefore the goods which are sold for transfer to sister concern unit for captive consumption would be as such at the same value at which the goods were sold to independent buyers are assessed. In respect of this contention he relied on the decision of the Larger Bench of this Tribunal in the case of Ispat Industries Ltd. v. Commissioner of C.Ex., Raigad [(2007) 209 ELT 185 (Tri.-LB)]. Therefore, it is his contention that as no duty was payable by the appellant, therefore, the question of payment of interest on such additional duty does not arise. It is his contention that although they have paid duty on the persistent of the respondent, but if it is assumed that the change in practice for valuation of stock transfer was adopted by the appellant on their own volition i.e. voluntarily, the appellant cannot now be compelled to accept the situation which was legally incorrect. If the system adopted by the Appellants either on their own volition or on insistence by the department was not legal, department cannot compel the appellant to perpetuate the illegality. In regard to whatever duty was to be paid by the appellant, the same is entitled to Cenvat Credit to appellant themselves. In that circumstances, the whole exercise was revenue neutral therefore the appellant is not liable to pay interest.
7. With regard to Appeals mentioned at Sl.No. 2-12, it is the contention of the appellant that although differential duty was paid with a delay, but the same was entitled to Cenvat Credit to their sister unit as it is a revenue neutral situation as held by the Larger Bench of this Tribunal in the case of Jay Yuhshin Ltd. v. CCE, New Delhi [(2000) 119 ELT 718 (Tribunal-LB)] therefore duty is payable by the appellant in case of revenue neutral situation, so question of payment of interest does not arise.
8. He further submits that demands are time barred as there was no misstatement or suppression of facts on the part of the appellant, therefore, extended period cannot be invoked. In view of the above submissions, he prayed that the impugned orders are to be set aside qua demanding interest and imposing penalty on the appellants.
9. On the other hand the Ld.AR for the department submitted that when duty is paid on supplementary invoices, the appellant is liable to pay interest. Therefore, the demand of interest is rightly confirmed against the appellant. To support his contention he relied on the decision of this Tribunal in the case of Indoworth (India) Ltd. v. CC & CE, Nagpur [2011 (22) STR 197 (Tri.-Mumbai) which was affirmed by the Hon'ble Bombay High Court as reported in 2012 (27) STR 3 (Bom.)
10. Heard the parties, considered the submissions.
11. The facts of the case are not in dispute that in appeal mentioned at Sl.No. 1, the appellant paid duty on the strength of supplementary invoices in terms of valuation adopted in terms of Rule 8 of the Valuation Rules, 2000, but the Appellant was clearing goods to independent buyers also and in other cases, the differential duty was paid by ascertaining late the value of largest aggregate quantity of identical goods cleared to independent buyers.
12. The moot question arises that as in appeal mentioned at Sl.No. 1, whether the appellant was liable to pay duty or not in a case where they are selling goods to their independent buyers as well as to their sister units. The answer is that appellant is not liable to pay duty in terms of Rule 8 of Central Excise Valuation Rules, 2000. As differential duty was not payable in appeal mentioned at Sl.No. 1, the question arises whether interest is payable by the appellant or not. We find that similar issue was examined by the Hon'ble Gujarat High Court in the case of CCE & C, C.C.E & C., Vadodara-Ii v. Gujarat Narmada Fertilizers Co. Ltd. [(2012) 285 ELT 336 (Guj.)], wherein the Hon'ble High Court observed as under:—
“11. In the present case, when the period of limitation had already expired and when the extended period beyond one year was not available to the department as held by the Commissioner himself in his order-in-original, to our mind the respondent was not liable to pay even the basic duty. But for the respondent voluntarily making payment of such duty short-paid, it was not open for the Department to recover the same under sub-section (1) of Section 11A of the Act. In absence of any such voluntary payment, recovery of the unpaid duty would not have been possible. In that view of the matter, we do not find the case would fall under sub-section (2B) of Section 11A of the Act. Sub-section (2B) of Section 11A of the Act applies in a case where there is voluntary payment of unpaid duty before issuance of show cause notice under sub-section (1) of Section 11A. When the provision refers to show cause notice, it means a show cause notice which could have been validly issued and surely not a notice which had become time-barred. If by efflux of time and in absence of availability of extended period of limitation, such show cause notice itself had become time-barred, any payment made voluntarily by the manufacturer cannot be viewed as one made under sub-section (2B) of Section 11A of the Act.
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13. Accepting the stand of the Department that even in such a case once the payment of duty is made, interest liability would follow would bring about an incongruent situation. The recovery of the unpaid or short paid duty would become time-barred. If the manufacturer does not pay it voluntarily, it would not be possible for the Department to recover the same. But if he does it voluntarily despite completion of period of limitation, he would, further be saddled with the liability to pay statutory interest. Surely, this was not the intention of the Legislature while sub-section (2B) was introduced in Section 11A of the Act.”
13. We have already held that as the appellant was not liable to pay duty in terms of Rule 8 of Central Excise Valuation Rules, 2000, therefore, no interest is payable by the appellant in view of the decision of the Hon'ble High Court in the case of CCE & C, C.C.E & C., Vadodara-Ii v. Gujarat Narmada Fertilizers Co. Ltd. (supra). Therefore, the impugned order in Appeal No. E/552/2011 is set aside and the appeal is allowed with consequential relief.
14. For appeals mentioned at Sl.No. 2-12, it is the contention of the Ld. Counsel for the appellant that the goods have been cleared by the appellant to their sister unit, wherein whatever duty is paid by the appellant, the same is entitled as Cenvat credit. In that circumstances, as held by the Larger Bench of this Tribunal in the case of Jai Yuhshin Ltd. (supra), wherein this Tribunal has observed as under:—
“13. In the light of the above discussion, we answer the reference as under:
(a) Revenue neutrality being a question of fact, the same is to be established in the facts of each case and not merely by showing the availability of an alternate scheme;
(b) Where the scheme opted for by the assessee is found to have been misused (in contradistinction to mere deviation or failure to observe all the conditions) the existence of an alternate scheme would not be an acceptable defence;
(c) With particular reference to Modvat scheme (which has occasioned this reference) it has to be shown that the Revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee's manufactured goods;
(d) We express our opinion in favour of the view taken in the case of International Auto Products (P) Ltd. (supra) and endorse the proposition that once an assessee has chosen to pay duty, he has to take all the consequences of payment of duty.”
15. We hold that it is a revenue neutral situation.
16. As held by the Hon'ble Gujarat High Court in the case of CCE & C, Vadodara-II v. Indeos Abs Ltd. [(2010) 254 ELT 628 (Guj.)], in case the goods were cleared to their own sister concern, which is availing benefit of the Modvat Credit, hence the entire exercise is revenue neutral. Although the appellant paid differential duty later on, but same was available as Cenvat Credit to their sister unit is a revenue neutral situation, if appellant would have not paid differential duty that was not payable in terms of the above cited decisions. Therefore, as duty was not payable, the payment of interest does not arise in the case of revenue neutral situation. Further the case law relied upon by the Ld.AR for the department in the case of Indoworth (India) Ltd. (supra), is not applicable to the facts of the present case as in that case the appellant sought refund of interest paid on Service Tax which was not payable by the assessee.
17. In view of the above discussion, we hold that it is the revenue neutral situation, no duty is payable by the appellant therefore whatever duty paid by the appellant Cenvat credit of the same has been availed by the sister unit, question of payment of interest does not arise.
18. In view of the above discussion, the appeals mentioned at Sl.No. 2-12 are also allowed by setting aside the impugned orders.
19. In the result, all the appeals are allowed with consequential relief.
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