2007 (6) TMI 328 - AT - Central Excise

Summary

Issues: Recovery of interest amount demanded in impugned orders.

Analysis:
The judgment pertains to two applications seeking to stay the recovery of interest amount demanded in impugned orders. The appellants had made clearances during specific years under provisional assessment due to a price variation clause in the contract. Upon finalization of provisional assessment, supplementary invoices were raised to recover the differential value from customers. The interest demanded in the impugned orders is for the period between the date of supplementary invoices and the 5th of the corresponding succeeding month. The main contention revolves around the demand for interest on goods cleared under provisional assessment. The appellants challenge the amounts demanded in the appeals, highlighting the specific amounts in each case.

The legal counsel for the appellants argues that interest should only be payable from the month succeeding the final assessment and determination of the differential duty. On the other hand, the JDR contends that as per Rule 7(4) of the Central Excise Rules 2002, interest for goods cleared on provisional assessment is to be paid with reference to the date of clearance from the factory. The judgment delves into the interpretation of Rule 7(4) of the Cenvat Credit Rules, 2002, which specifies the liability of the assessee to pay interest from the first day of the month succeeding the one in which the amount is determined until the payment date.

The tribunal acknowledges the liability of the assessee to pay interest for the period between the provisional duty payment and the finalization of assessment. While the quantified and demanded amounts require further examination, the tribunal rules that the amounts yet to be quantified are prima facie payable by the assessee. The learned Counsel offers to pay the quantified amounts within four weeks, and the tribunal orders a stay on the recovery of the amounts not quantified until the final disposal of the appeal. The judgment concludes with the pronouncement and dictation of the decision in the open court.