2019 (7) TMI 252 - AT - Central Excise

Demand of interest on the differential duty on account of price escalation clause - price escalation clause - design, loading, supply and unloading on FOR destination basis including transport of materials etc. - HELD THAT - The issue whether assessee is liable to pay interest on the differential duty on account of price escalation clause, stands covered in favour of the revenue by the decision of the Hon ble Apex Court in M/S. STEEL AUTHORITY OF INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR 2019 (5) TMI 657 - SUPREME COURT where it was held that Undoubtedly, the amended provisions of Section 11A empowered recovery of duty even in a case where the classification list has been approved earlier and it would operate from the date of removal and not from the date on which show cause was issued. Appeal dismissed - decided against appellant.

Summary

Issues:
- Liability to pay interest on the differential duty due to price escalation clause.

Analysis:
The appellant, a manufacturer of tower parts and transmission lines, cleared goods to specific clients under agreements for design, loading, supply, and unloading on FOR destination basis. The agreements included a price escalation clause, with the appellant discharging the differential duty but not paying the interest on it. A show cause notice was issued, leading to the demand for interest and a penalty, which was set aside by the original authority but confirmed by the Commissioner (Appeals), prompting this appeal.

The appellant argued that the liability to pay interest on the differential duty due to price escalation was decided by the Hon'ble Apex Court in a specific case involving Steel Authority of India Ltd. The department's representative appeared, and after hearing both sides, the Tribunal noted that the issue of interest on the differential duty due to price escalation was settled in favor of the revenue by the Apex Court's decision. Consequently, the Tribunal held that the impugned order required no interference and dismissed the appeal.

In conclusion, the Tribunal upheld the liability of the appellant to pay interest on the differential duty due to the price escalation clause based on the precedent set by the Hon'ble Apex Court's decision. The appeal was dismissed, affirming the demand for interest on the differential duty.