2018 (2) TMI 910 - AT - Central Excise

Demand of interest under Rule 7(4) of the Central Excise Rules read with Section 11AA of Central Excise Act - finalization of provisional assessment - Held that - the issue is no more res integra and has been settled by the Hon ble Supreme Court in the case of Commissioner V. CEAT Limited 2015 (12) TMI 1587 - SUPREME COURT wherein it was held that interest is not required to be paid on differential duty if the same is paid before finalization of assessment - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against rejection of appeal by Commissioner (Appeals) regarding differential duty payment and interest charges on provisional assessment.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore was directed against the order passed by the Commissioner (Appeals) rejecting the appellant's appeal. The appellant, engaged in the manufacture of Tablet PCs, Battery Packs, and Solar Chargers, had obtained a Purchase Order from the Ministry of Rural Development, Government of India. The indicative unit prices in the Purchase Orders were revised, leading to the appellant paying the differential duty on the increased value. The Assistant Commissioner of Central Excise finalized the provisional assessment, demanded interest under Rule 7(4) of the Central Excise Rules, and the appellant's appeal was rejected by the Commissioner (Appeals), prompting the present appeal.

During the hearing, the appellant's representative argued that the impugned order contradicted binding judicial precedent, emphasizing that the payment of the differential duty amount was undisputed. The appellant had calculated and paid the differential duty before the finalization of provisional assessments. Reference was made to a judgment of the Bombay High Court and subsequent decisions by the Hon'ble Supreme Court and the Bombay Tribunal, establishing that interest is not applicable on the paid differential duty before assessment finalization. Conversely, the Revenue supported the findings of the impugned order.

After hearing both parties, the Tribunal noted that the issue had been settled by the Supreme Court in the case of Commissioner v. CEAT Limited, upholding the Bombay High Court decision that interest is not required on the paid differential duty before assessment finalization. Relying on this legal precedent, the Tribunal allowed the appeal, setting aside the impugned order and providing consequential relief, if any.

In conclusion, the Tribunal's decision was based on the established legal principle that interest is not chargeable on the paid differential duty before the finalization of assessment, as affirmed by the Supreme Court. The appellant's appeal was allowed, and the impugned order was set aside, providing relief in line with the legal precedent cited during the proceedings.