2017 (6) TMI 998 - AT - Central Excise

Liability of interest - duty not paid or short paid - Sections 11 A and 11 AB of CEA - Held that - it appears that there are two views on the issue and the matter is now pending with the Larger Bench of the Hon ble Supreme Court. When it is so it is deemed fit to set aside the impugned order and remand the matter to the Original Adjudicating Authority to decide the same afresh, as and when the decision of the Larger Bench of the Hon ble Supreme Court is made available on the subject and after giving the opportunity of personal hearing to both sides - appeal allowed by way of remand.

Summary

Issues:
Appeal against confirmation of interest liability under Section 11 AB of Central Excise Act, 1944.

Analysis:
The appellant, engaged in manufacturing electrical transformers, availed Cenvat credit and sold goods at factory gate prices. Fluctuations in raw material prices led to supplementary invoices and payment of duty on differential amounts. The Department issued Show Cause Notices demanding interest on duty paid for price variation bills. The appellant contended that the Notice was time-barred, except for January and February 2007. The Revenue argued for interest payment under Sections 11 A and 11 AB of the Act.

The Tribunal considered the case and referred to Supreme Court judgments. It noted conflicting decisions in SKF India Ltd. and International Auto Limited cases versus Steel Authority of India Limited case. The latter emphasized that duty is chargeable based on the price at the time of goods removal, not on subsequent price changes. The Tribunal highlighted the need for consistency in law and decided to remand the matter to the Original Adjudicating Authority due to the conflicting views. Pending the Larger Bench's decision, the Tribunal maintained the status quo regarding recovery or refund from the appellant.

In conclusion, the Tribunal allowed the appeal by remanding the case for fresh consideration post the Larger Bench's decision. The conflicting views on the issue required a re-evaluation, emphasizing the importance of maintaining consistency and certainty in legal interpretations. The matter was deemed crucial and pending with the Larger Bench for further clarification, necessitating a remand for a fresh decision based on the final judicial pronouncement.