2013 (10) TMI 719 - AT - Central Excise

Revision in price supplementary invoice - payment of duty on differential amount Whether interest is imposable on revision of prices having retrospective effect - Held that - Following Commissioner of Central Excise, Pune Versus M/s SKF India Ltd. 2009 (7) TMI 6 - SUPREME COURT - The assessee gave its reply stating that the payment of differential duty was made by it at the time of issuing supplementary invoices to the customers and, therefore, there was no question of charging interest much less any penalty - The differential duty was paid only later when the assessee issued supplementary invoices to its customers demanding the balance amounts - it was clearly a case of short payment of duty though indeed completely unintended and without any element of deceit etc. The payment of differential duty thus clearly came under sub-section (2B) of section 11A and attracted levy of interest under section 11AB of the Act Partial Stay granted.

Summary

Issues involved:
Waiver of predeposit of interest under Section 11AB of the Central Excise Act, 1944.

Analysis:

Issue 1: Interest imposable on revision of prices with retrospective effect

The Appellant, engaged in manufacturing excisable goods, had supplied goods to Indian Railways under a contract with a price escalation clause. The Department issued a demand notice for recovery of interest under Section 11AB of the CEA, contending that interest is payable on the differential duty from the date of clearance of goods due to revision of prices. The Appellant argued that interest was not leviable as they were unaware of the value at the time of clearance, citing the escalation clause in the contract. The Appellant distinguished the case of CCE, Pune vs. SKF India Ltd., stating that the value in that case was final, unlike the ongoing price revisions in their contract. The Revenue, on the other hand, relied on the judgments of the Hon'ble Supreme Court in SKF and CCE vs. International Auto Ltd. The Tribunal, after hearing both sides, found the issue to be whether interest is imposable on revision of prices with retrospective effect. The Tribunal noted that the issue was covered by the judgment in SKF. Consequently, the Tribunal directed the Appellant to deposit a specific amount within a set period, with the balance dues waived and recovery stayed during the appeal's pendency.

This judgment clarifies the applicability of interest under Section 11AB of the CEA in cases involving revision of prices with retrospective effect. The Tribunal's decision was based on the interpretation of relevant legal precedents and the specific circumstances of the case, emphasizing the importance of compliance with deposit requirements while considering the waiver of balance dues during the appeal process.

This detailed analysis provides a comprehensive understanding of the judgment's key issues, arguments presented by both parties, legal precedents cited, and the Tribunal's decision, ensuring a thorough overview of the case.