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2014 (8) TMI 537 - AT - Central ExciseInterest on the delayed payment of duty - interest on differential duty due to finalization of provisional assessment - Held that - Decision of the Division Bench of the Tribunal in the case of Tata Motors Ltd. (2011 (3) TMI 531 - CESTAT, MUMBAI), following the decision of the Hon ble Bombay High Court allowed the appeal filed by the assessee. But, the Tribunal in the applicant s own case BHEL (2011 (6) TMI 396 - CESTAT, DELHI) had taken a view against the applicant. The contention of the learned counsel that, in their own case, differential duty was paid after assessment is not clear on a plain reading of the said decision. It is noted that in the present case, the demand of interest involved is in respect of raising supplementary invoice for price revision, which is akin to the decision of the Hon ble Supreme Court in the case of SKF India (2009 (7) TMI 6 - SUPREME COURT). The submission of the learned Advocate that the decision of SKF India Ltd. (supra) would not apply in the case of provisional assessment, would be examined at the time of appeal hearing at length. applicant failed to make out a prima facie for waiver of predeposit of entire amount of interest - stay granted partly.
Issues:
1. Demand of interest on differential duty under provisional assessment. 2. Interpretation of Rule 7(4) of the Central Excise Rules, 2002. 3. Applicability of judicial precedents in determining interest liability. 4. Prima facie case for waiver of predeposit of interest. Analysis: Issue 1: Demand of interest on differential duty under provisional assessment The case involved the demand of interest by the Assistant Commissioner of Central Excise on the payment of differential duty against provisional assessment orders. The Commissioner (Appeals) rejected the appeals filed by the assessee and allowed the appeals filed by the Revenue, with a qualification that interest is not chargeable on the part of the differential duty held as refundable by the adjudicating authority. Issue 2: Interpretation of Rule 7(4) of the Central Excise Rules, 2002 The learned counsel for the applicant argued that interest is payable under Rule 7(4) only after the finalization of assessment. The applicant contended that since they paid the differential duty before finalization of the provisional assessment, no interest is payable. Reference was made to judicial precedents like the decision of the Tribunal in the case of Ispat Industries Ltd. Vs. CCE, Nagpur and the decision of the Hon'ble Bombay High Court in CCE, Nagpur Vs. Ispat Industries Ltd. to support this argument. Issue 3: Applicability of judicial precedents in determining interest liability Both parties relied on various judicial precedents to support their arguments. The learned AR for Revenue emphasized the decision of the Hon'ble Supreme Court in the case of SKF India Ltd. and the Larger Bench decision of the Tribunal in the case of Cadbury India Ltd. to assert that interest liability arises from the date of clearance of goods. On the other hand, the applicant cited the decision of the Division Bench of the Tribunal in the case of Tata Motors Ltd. and the decision of the Hon'ble Bombay High Court to support their stance against the demand of interest. Issue 4: Prima facie case for waiver of predeposit of interest After hearing both sides, the Tribunal found that the applicant failed to establish a prima facie case for the waiver of predeposit of the entire amount of interest. Consequently, the Tribunal directed the applicant to deposit 25% of the interest within a specified period, with the remaining balance of interest waived upon compliance, and recovery stayed during the pendency of the appeal. In conclusion, the judgment addressed the demand of interest on differential duty under provisional assessment, the interpretation of Rule 7(4) of the Central Excise Rules, the applicability of judicial precedents in determining interest liability, and the establishment of a prima facie case for the waiver of predeposit of interest.
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