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2019 (8) TMI 252 - AT - Central ExciseDemand for interest on delayed payment of duty - whether the Department can demand interest under Section 11AB of the Central Excise Act 1944 on the differential duty paid through supplementary invoices due to subsequent increase in price of the goods by virtue of price escalation clause? - HELD THAT - Since this issue has now been settled by the Larger Bench of the Supreme Court in the case of M/S. STEEL AUTHORITY OF INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR 2015 (12) TMI 594 - SUPREME COURT - Therefore, by following the ratio of the above said decision of the Apex Court, I hold that appellant is liable to pay the interest on the differential duty paid through supplementary invoices. Time Limitation - HELD THAT - The time limit prescribed under Section 11A of the Central Excise Act is also applicable for recovery of interest - the longer period of limitation is not invokable in the present case because the short payment is not due to fraud, collusion, suppression etc with intent to evade duty - the extended period of limitation is not invokable in the present case. In the present case the entire demand of interest on supplementary invoice is barred by limitation - Appeal allowed on limitation.
Issues:
Demand for interest on delayed payment of duty, applicability of Section 11AB of the Central Excise Act 1944, limitation period for recovery of interest on differential duty paid through supplementary invoices. Analysis: 1. Demand for Interest on Delayed Payment of Duty: The appeals were filed against an order upholding the demand for interest on delayed payment of duty. The appellants, manufacturers of excisable goods, faced charges of interest on differential duty paid through supplementary invoices following a revision of prices with retrospective effect. The original authority and the Commissioner confirmed the interest and imposed penalties. The issue revolved around whether the Department could demand interest on the differential duty paid through supplementary invoices due to a subsequent increase in the price of goods. 2. Applicability of Section 11AB of the Central Excise Act 1944: The counsel for the appellant argued that conflicting decisions existed on the issue of interest demand, citing the Steel Authority of India Ltd. cases. The Supreme Court's decision clarified that interest is payable on differential duty paid through supplementary invoices. The counsel contended that the demand for interest was barred by limitation, relying on various decisions establishing the time limit under Section 11A of the Central Excise Act for recovery of interest. The AR defended the impugned order, asserting that the law, as per SKF India Ltd. until 2015, required payment of interest. 3. Limitation Period for Recovery of Interest on Differential Duty: The Tribunal, after considering submissions, held that interest was payable on the differential duty paid through supplementary invoices per the settled position by the Supreme Court. The time limit prescribed under Section 11A was deemed applicable for interest recovery. The Tribunal rejected the invocation of the extended period of limitation due to lack of fraud or suppression to evade duty payment. Citing relevant case laws, the Tribunal concluded that the demand for interest on supplementary invoices was barred by limitation, allowing the appeals solely on the limitation aspect, not on merit. In conclusion, the judgment addressed the demand for interest on delayed duty payment, the applicability of Section 11AB of the Central Excise Act, and the limitation period for interest recovery on differential duty paid through supplementary invoices, ultimately ruling in favor of the appellant based on the limitation issue.
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