2015 (8) TMI 809 - AT - Central Excise

Demand u/s 11AB - whether the assessees are liable to pay interest under Section 11AB of the Central Excise Act, 1944 on differential duty paid consequent to price escalation after clearance of goods by raising supplementary invoices - Held that - Supreme Court in the case of Commissioner of Central Excise, Pune Vs SKF India Ltd. reported in 2009 (7) TMI 6 - SUPREME COURT held that payment of differential duty at a later date is clearly a case of short-payment of duty at the time of clearance and, therefore, interest is payable under Section 11AB of Central Excise Act, 1944. The Hon ble Supreme Court restored the order passed by the Assistant Commissioner insofar as charge of interest and also observed that there is no question of imposition of penalty. - Respectfully following the decision of the Hon ble Supreme Court, in all these appeals we uphold the demand of interest and penalties are set aside. - Decided against Revenue.

Summary

Issues involved:
Whether assessees are liable to pay interest under Section 11AB of the Central Excise Act, 1944 on differential duty paid due to price escalation after goods clearance by raising supplementary invoices.

Analysis:
The judgment by the Appellate Tribunal CESTAT CHENNAI dealt with the common issue of whether assessees are required to pay interest under Section 11AB of the Central Excise Act, 1944 on the differential duty paid following price escalation post goods clearance through supplementary invoices. The learned counsels representing the assessees argued that in some instances, penalties were also imposed in addition to interest. The Tribunal referred to a precedent set by the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Pune Vs SKF India Ltd., where it was established that the payment of differential duty at a later stage constitutes a short-payment of duty during clearance, necessitating the payment of interest under Section 11AB of the Central Excise Act, 1944. The Supreme Court specifically reinstated the order for interest payment by the Assistant Commissioner and clarified that penalties should not be imposed in such cases. Accordingly, the Tribunal, in line with the Supreme Court's decision, upheld the demand for interest while setting aside any penalties imposed. The judgment concluded by disposing of all appeals from both the assessees and the department based on the aforementioned terms.