2013 (8) TMI 156 - AT - Central Excise

Interest chargeable under Section 11AB - Appellants had supplied finished goods to their customers under contract with price escalation clause - on finalization of price, the same was revised upwards from back date and on receipt of differential amount on account of price escalation, the appellant paid the Central excise duty chargeable on the same - Appellant did not pay the interest on this duty paid under supplementary invoices Held that - Relying upon the Apex Court judgment in the case of CCE Pune vs. S K F Bearings Ltd. reported in 2009 (7) TMI 6 - SUPREME COURT , it was held that interest is payable under section 11AB Decided against the Assessee.

Summary

Issues involved:
- Applicability of interest on duty paid under supplementary invoices
- Interpretation of Section 11 AB of the Central Excise Act
- Challenge to the order of the Commissioner (Appeals)

Analysis:

1. Applicability of interest on duty paid under supplementary invoices:
The judgment revolves around the issue of whether interest on duty paid under supplementary invoices is chargeable under Section 11 AB of the Central Excise Act. The appellants revised the prices of finished goods supplied to customers with a price escalation clause, leading to an upward revision in prices and subsequent payment of Central excise duty on the differential amount. However, they did not pay interest on this duty. The Assistant Commissioner held that interest is chargeable on such duty paid under supplementary invoices, which was confirmed by the Commissioner (Appeals). The Tribunal upheld this decision, citing the precedent set by the Apex Court in the case of CCE Pune vs. S K F Bearings Ltd. The judgment affirms that interest on duty paid under supplementary invoices is indeed chargeable as per the provisions of Section 11 AB.

2. Interpretation of Section 11 AB of the Central Excise Act:
The Tribunal's decision is based on a thorough analysis of the provisions of Section 11 AB of the Central Excise Act. This section deals with the payment of interest on delayed payment of duty. The judgment highlights that the legislative intent behind Section 11 AB is to ensure the timely payment of duty to the government exchequer. By upholding the chargeability of interest on duty paid under supplementary invoices, the Tribunal reinforces the importance of complying with the statutory provisions to avoid any financial penalties or liabilities.

3. Challenge to the order of the Commissioner (Appeals):
The appellants had challenged the order of the Commissioner (Appeals) on various grounds through written submissions. However, the Tribunal, after considering the arguments put forth by both parties, concluded that since the issue at hand had already been settled by the Apex Court in a previous judgment, there was no merit in the appeal. The Tribunal's decision to dismiss the appeal signifies the importance of adhering to established legal precedents and the binding nature of higher court decisions on similar legal issues.

In conclusion, the judgment by the Appellate Tribunal CESTAT NEW DELHI reinforces the applicability of interest on duty paid under supplementary invoices as per the provisions of Section 11 AB of the Central Excise Act. The decision underscores the significance of complying with statutory requirements and upholding legal precedents in matters concerning excise duty payments and liabilities.