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2019 (7) TMI 1170 - AT - Central ExciseDemand of interest on the differential duty paid through supplementary invoices - subsequent increase in price of goods - price escalation clause - Section 11AB of the Central Excise Act 1944 - time limitation - HELD THAT - It is a settled law that time limit as prescribed under Section 11A of the Central Excise Act is also applicable for recovery of interest in view of the decision of the Supreme Court in the case of CCE VERSUS TVS WHIRLPOOL LTD. 1999 (10) TMI 701 - SC ORDER . Extended period of limitation - HELD THAT - In the present case there is no suppression, fraud or collusion and therefore the longer period of limitation is not invokable in the present case. The appellant is only liable to pay interest for the normal period as prescribed by law whereas in both the appeals substantial period is beyond limitation. For the purpose of computing the interest for the normal period the case is remanded back to the original authority to quantify the interest for the normal period of one year which the appellants will be liable to pay - appeal allowed by way of remand.
Issues Involved:
Demand of interest under Section 11AB of the Central Excise Act 1944 on differential duty paid through supplementary invoices due to price escalation clause. Applicability of time limit under Section 11A of the Central Excise Act for recovery of interest. Invocability of extended period of limitation when the issue is referred to the Larger Bench. Allegation of suppression/misstatement affecting the period of limitation for interest recovery. Analysis: Issue 1: Demand of Interest on Differential Duty The appellant contested the demand of interest under Section 11AB of the Central Excise Act on the differential duty paid through supplementary invoices due to a subsequent increase in the price of goods. The appellant relied on conflicting decisions, including the case of Steel Authority of India Ltd., where the Supreme Court held that interest is payable on such differential duty. The appellant argued on the grounds of limitation and cited various precedents to support the time limit applicability for interest recovery. Issue 2: Applicability of Time Limit under Section 11A The learned counsel for the appellant emphasized that the time limit prescribed under Section 11A of the Central Excise Act is also relevant for the recovery of interest. Citing the decision in TVS Whirlpool Ltd., the counsel argued that the same time limit should apply to both principal amount and interest. It was contended that the demand for interest beyond the specified period should be considered time-barred. Issue 3: Extended Period of Limitation The appellant argued against the invocability of the extended period of limitation in cases where the issue is referred to the Larger Bench. Relying on various judgments, the appellant asserted that the extended period of limitation should not be applicable in such circumstances. The absence of suppression or misstatement in relation to the supplementary invoices was highlighted to support the argument against invoking the longer period of limitation. Issue 4: Allegation of Suppression/Misstatement The absence of any allegation of suppression or misstatement regarding the supplementary invoices was emphasized to argue against the invocability of the longer period of limitation. The appellant relied on a Division Bench decision to support the contention that in the absence of such allegations, the longer period of limitation should not be applied. The Tribunal's decision in a similar case was cited to reinforce the argument. In conclusion, the Appellate Tribunal, after considering the submissions of both parties and reviewing the material on record, held that the appellant is liable to pay interest for the normal period as prescribed by law. The Tribunal remanded the case back to the original authority to quantify the interest for the normal period of one year, as the substantial period in both appeals was deemed to be beyond limitation. The appeals were disposed of accordingly.
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