2017 (6) TMI 887 - AT - Central Excise

Price variation clause - receipt of additional consideration - the appellant had paid the duty along with interest - penalty u/s 11AC - Held that - the learned Commissioner (A) has given cogent reasons for imposition of penalty - The assessee admits that whenever the appellants receive additional consideration they had paid duty on the same, but the reasons that prevented payment of applicable duty in the present instance lack credibility. The onus is on the assessee to intimate the department of any such receipt and also to pay the duty - penalty upheld - appeal dismissed - decided against appellant.

Summary

Issues:
- Appeal against rejection of appeal by Commissioner (A) for non-payment of excise duty on additional consideration received under price variation clause.

Analysis:

Issue 1: Rejection of appeal by Commissioner (A)
The appellant, a manufacturer of ACSR cables for a state electricity board, availed a price escalation clause and paid excise duty on amounts received. The Department audited the accounts and found a discrepancy in the sales value declared and the assessable value plus duty as per ER1 returns. The Department confirmed a demand of excise duty under Section 11A(1) of the Central Excise Act, 1944, along with interest and penalty for willful evasion. The appellant contended that they had a practice of paying duty on additional consideration received and argued that there was no requirement to inform the Department separately about such receipts. The Commissioner (A) rejected the appeal, leading to the present appeal before the Tribunal.

Issue 2: Arguments of the Parties
The appellant argued that there was no intention to evade duty, as they had a practice of paying duty on additional consideration received under the price variation clause. They maintained that they had disclosed all relevant information to the Department and had not concealed anything. On the other hand, the Department contended that the appellant deliberately concealed information regarding additional consideration received and failed to pay duty on it. The Department emphasized that it was the responsibility of the assessee to inform the Department about such receipts and pay the duty accordingly.

Issue 3: Imposition of Penalty
The Tribunal found that the Commissioner (A) had provided valid reasons for imposing the penalty. The appellant's argument that they had accounted for the additional consideration in their balance sheet and profit and loss account was deemed insufficient. Mere accounting without disclosing in ER1 returns was not considered a voluntary disclosure. The Tribunal upheld the impugned order, stating that there was no infirmity warranting interference. The onus was placed on the assessee to inform the Department about any additional consideration received and pay the due duty, which the appellant failed to do in this case.

In conclusion, the Tribunal upheld the decision of the Commissioner (A) to reject the appeal, emphasizing the importance of disclosing additional consideration received and paying the corresponding excise duty as required by law.