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2014 (11) TMI 362 - AT - Central ExciseDemand of differential duty - Provisional assessment - Held that - Duty has to be calculated after considering the duty payable on all the goods together and therefore excess payment if any will have to be adjusted towards short payment to calculate the differential duty payable - Decision of assessee s own previous case 2011 (10) TMI 201 - KARNATAKA HIGH COURT followed. Relevant date to pay interest in case of finalization of provisional assessment interest is liable to be paid by the appellant from 1st day of the next month on the differential duty payable for each month as finalized. Needless to say the interest has to be calculated only if there is a differential duty payable after setting off the excess payment towards short payment - Following decision of CADBURY INDIA LTD. Versus COMMISSIONER OF CUS. & C. EX., PUNE-I 2008 (11) TMI 62 - CESTAT MUMBAI - Decided in favour of Revenue.
Issues:
1. Calculation of duty in provisional assessment 2. Payment of interest on short payment of duty 3. Applicability of High Court decisions on interest payment Analysis: Issue 1: Calculation of duty in provisional assessment The appeals involved two parties, one being the Revenue and the other the assessee, covering the periods 2005-06 and 2006-07. The appellant opted for provisional assessment due to a related party transaction, which was allowed. However, upon finalization, it was discovered that there was both short payment and excess payment of duty. In 2005-06, there was a short payment of duty amounting to Rs. 1,30,65,161, which was rectified before finalization. Additionally, there was an excess payment of Rs. 47,51,060. In 2006-07, the excess payment was Rs. 1,10,84,180, and the short payment was Rs. 35,29,558. Issue 2: Payment of interest on short payment of duty The counsel argued that interest payment on short payment of duty should not apply as per the High Court's decision, which stated that interest calculation should consider the total duty payable for all goods, not each item separately. Referring to past cases and the Supreme Court's order, the counsel contended that if differential duty is paid before final assessment, no interest is due. However, the judge disagreed, stating that the law was not final as the Supreme Court kept the question of law open, indicating that the High Court's decision did not establish a binding precedent. Therefore, interest was deemed payable from the 1st day of the following month on the differential duty. Issue 3: Applicability of High Court decisions on interest payment The judge concluded that the decision of the Larger Bench of the Tribunal, not the High Court's decision, should be followed regarding interest payment. The dismissal of the Special Leave Petition by the Supreme Court did not establish a final decision on the law. Thus, the interest was held payable from the 1st day of the next month on the differential duty, after adjusting excess payment towards short payment. The appeals were decided based on these observations.
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