2007 (11) TMI 228 - AT - Central Excise

Issue pertains to demand of interest on the duty subsequently paid on revision of prices - goods were cleared by supplementary invoices to the customers on onward revision of prices - only duty is required to be paid, not interest held that interest is not leviable when the differential duty is paid due to price variation- impugned order is set aside and appeal allowed

Summary

Issues:
1. Demand of interest on duty subsequently paid on revision of prices.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore dealt with the issue of demanding interest on duty paid after revising prices. The appellants had cleared goods by issuing supplementary invoices to customers upon price revision, paying duty but contesting the interest demand. The bench referred to previous cases like Motherson Sumi System Ltd. and Rashtriya Chemicals & Fertilizers Ltd. to support the appellants' argument that interest is not applicable in such cases. The bench highlighted Rule 173G, emphasizing that interest is not payable in circumstances where differential duty is paid due to price revision. The tribunal also cited the Alpine Housing Development Corporation Ltd. case, echoing similar findings. The judgment further referenced the Delhi Bench's decision in CCE, Bhopal v. D.K. Electrical Industries, reinforcing the stance that only differential duty is leviable in cases of price variation. The bench dismissed a different view expressed in the case of M/s. Inducto Casts, noting it as an ex-parte order and not considering previous judgments comprehensively. Ultimately, the tribunal upheld the consistent view that interest is not leviable when differential duty is paid due to price variation, setting aside the impugned order and allowing the appeal.