2002 (3) TMI 114 - AT - Central Excise

Summary

Issues:
1. Whether interest under Section 11AB of the Central Excise Act is payable in the absence of fraud, suppression of facts, or contravention of provisions with intent to evade payment of duty.
2. Whether duty becomes payable upon raising of price variation bills or upon acceptance of increased sale price by the purchaser.
3. Whether the appellant suppressed facts by not disclosing information about raising of price variation bills.

Analysis:
1. The appeal by the Revenue challenges the Commissioner's decision to quash the interest demand of over Rs. 12 lakhs from the assessee, contending that interest under Section 11AB is only applicable in cases involving fraud, suppression of facts, or contravention of rules to evade duty payment. The Revenue argues that the appellant did not disclose information about price variation bills, alleging suppression of facts. The Tribunal examined the records and found that the duty was paid by the appellant once the higher price was accepted and paid by the buyer, concluding that there was no suppression of facts as the duty was voluntarily paid upon acceptance of the increased price.

2. The case involved a contract for supply of transmission Line Towers with a price escalation clause. The appellant paid duty on the higher price after the buyer accepted the increased amount claimed as per the price variation condition. The Revenue contended that duty becomes payable upon raising of price variation bills, while the appellant argued that duty is due only upon acceptance of the higher price by the buyer. The Tribunal agreed with the appellant, stating that the duty became due upon acceptance of the increased price and payment by the buyer, not merely upon raising of the bill.

3. The Revenue's appeal also raised the issue of suppression of facts by the appellant for not disclosing information about the price variation bills. However, the Tribunal found that since the duty was paid voluntarily by the appellant upon acceptance of the higher price by the buyer, there was no suppression of facts. The Tribunal emphasized that the provisions of Section 11AB, which relate to payment of interest in cases involving fraud or suppression of facts, were not applicable in this scenario. Therefore, the Tribunal upheld the Commissioner's decision to quash the interest demand, ruling in favor of the assessee.

In conclusion, the Tribunal rejected the Revenue's appeal, affirming that interest under Section 11AB is not payable when duty is voluntarily paid upon acceptance of an increased price by the buyer, and there is no suppression of facts by the assessee in such circumstances.