2010 (9) TMI 612 - AT - Central Excise

Demand - Non speaking order - time limitation - It cannot be disputed that in case of absence of any obligation to bring a particular fact to the notice of the Department, failure to bring such fact to the notice of the Department, cannot be a ground for invocation of extended period of limitation - It is pertinent to note that the fact that the appellants did not pay the interest on the differential duty paid by them on issuance of the supplementary invoices as a result of price escalation is neither disputed nor can be disputed - Once the law is clear and it clearly required the assessee to pay the interest on such differential duty, if the assessee wanted to avoid such liability, it was obligatory on the part of the assessee to claim such benefit on the basis of provisions of law to be disclosed by the assessee to the Department - Merely because the serial numbers of the invoices were reflected in the returns filed by the appellants that by itself cannot give information about non-payment of the interest on the differential duty - Inspite of law having been declared clearly by the Apex Court, the appellants have not discharged the said liability even in relation to the year 2007-08 till this day - Appeal is dismissed

Issues Involved:
1. Alleged improper application of mind by the lower appellate authority.
2. Consideration of the decision of the Punjab & Haryana High Court in Polyplastics.
3. Liability of the assessee to pay interest on duty paid on supplementary invoices due to price escalation.
4. Bar of limitation for the demand of interest.

Detailed Analysis:

1. Alleged Improper Application of Mind by the Lower Appellate Authority:
The appellants contended that the lower appellate authority disposed of the matter hastily and without proper consideration of various contentions. They argued that the impugned order was illegal, arbitrary, and violative of natural justice. However, upon review, it was found that all points except the decision in Polyplastics were considered by the Commissioner (Appeals). The reasoning and conclusions were a separate issue, but it could not be said that the Commissioner (Appeals) failed to consider the points raised by the appellants.

2. Consideration of the Decision of the Punjab & Haryana High Court in Polyplastics:
The appellants argued that the decision in Polyplastics was not considered by the Commissioner (Appeals). The Tribunal noted that the decision in Polyplastics was based on a Bombay High Court decision, which the Apex Court in SKF India Ltd. had declared incorrect. Hence, non-consideration of Polyplastics did not amount to non-application of mind or illegality. The Apex Court's decision is binding, and no contrary decision by any High Court can bind lower authorities.

3. Liability of the Assessee to Pay Interest on Duty Paid on Supplementary Invoices Due to Price Escalation:
The core issue was whether the assessee was liable to pay interest on duty paid on supplementary invoices due to price escalation. The Apex Court in SKF India Ltd. clarified that interest is payable on delayed payment of duty, irrespective of the reason for delay. The Tribunal reiterated that the obligation to pay interest arises from the statutory provisions under Section 11AB of the Central Excise Act, 1944.

4. Bar of Limitation for the Demand of Interest:
The appellants argued that the demand for the year 2006-07 was barred by limitation as the show cause notice was issued beyond one year. The Tribunal noted that the extended period of limitation was invoked due to non-payment of interest and contravention of Section 11AB with intent to evade payment. The Tribunal held that failure to inform the Department about non-payment of interest, coupled with the intent to evade, justified invoking the extended period of limitation. The Tribunal found no fault with the Department's invocation of the extended period for the year 2006-07.

Conclusion:
The Tribunal dismissed the appeal, finding no justification for interference in the impugned order. The appellants were held liable to pay interest on the differential duty for both years under consideration, and the extended period of limitation was rightly invoked for the year 2006-07. The conduct of the appellants in delaying compliance with statutory obligations was also noted.

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