2010 (10) TMI 978 - AT - Central Excise

Summary

Issues:
1. Compliance with pre-deposit order and disposal of appeal within specified time frame.
2. Dispute regarding valuation of goods under Central Excise Valuation Rules, 2000 and CAS-4.
3. Applicability of interest on the payment of differential duty.

Issue 1: Compliance and Disposal Timeline
The matter involved compliance with a pre-deposit order by the Hon'ble High Court of Bombay, directing the appellants to make a payment and report compliance by a specified date. The High Court further directed the Tribunal to dispose of the appeal within one month of their order. The Tribunal, having recorded compliance by the appellants, proceeded to take up the appeal for final disposal within the stipulated timeline.

Issue 2: Valuation Dispute
The appellant contended that they cleared goods to their sister concern based on the valuation arrived at under Rule 8 of the Central Excise Valuation Rules, 2000, while the department insisted on valuation as per CAS-4. The appellant, upon departmental objection, paid the differential duty and took credit for the same. Subsequently, a show cause notice was issued proposing appropriation of the paid duty, along with interest and penalties. The Commissioner (Appeals) dropped the penalty but confirmed duty and interest, leading to the appellant's appeal against the interest imposition.

Issue 3: Interest on Differential Duty
The appellant argued against the levying of interest on the paid differential duty, citing precedents and judgments. The appellant emphasized the revenue-neutral nature of the situation, relying on case laws to support their stance. The Departmental Representative, however, referred to a specific case where interest was deemed payable under the provisions of Section 11A of the Central Excise Act. The Tribunal analyzed the submissions and legal provisions, ultimately concluding that interest on the delayed payment of duty was indeed applicable in the present case due to the undisputed payment of differential duty by the appellants, in line with the decision in SKF India Ltd. case.

In the final judgment pronounced on 6-10-2010, the Tribunal upheld the levy of interest as per Section 11AB of the Central Excise Act, rejecting the appellant's appeal and confirming the impugned order.