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2023 (10) TMI 1300 - AT - Central ExciseInterest on differential duty by invoking extended period of limitation - suppression of facts or not - Impugned order passed by not properly appreciating the facts and the law - violation of principles of natural justice - HELD THAT - The appellant deposited the duty on supplementary invoices as and when the supplementary invoices were issued. It is also found that the appellant has deposited the interest under protest and has submitted that in the present case invoking the extended period of limitation to demand the interest alleging suppression is not sustainable because during the relevant period there were divergent views on the issue of liability of interest on payment of central excise duty while issuing supplementary invoices under the Central Excise Act, 1944. This Tribunal in the case of SUPER THREADING INDIA PVT LTD VERSUS COMMISSIONER OF CE ST, LUDHIANA 2021 (5) TMI 907 - CESTAT CHANDIGARH and M/S. KEC INTERNATIONAL LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR 2022 (3) TMI 692 - CESTAT NEW DELHI had held that extended period of limitation cannot be invoked as there is no fraud/mis-statement with intent to evade payment of duty. Thus, invoking the extending period of limitation is not sustainable and the demand of interest by invoking the extended period of limitation is not justified and the same is set aside by remanding the matter to the Original authority to re-quantify the demand only for the normal period and any amount deposited over and above the normal period of one year should be returned back to the appellant as he has paid the entire disputed demand of interest under protest. Appeal allowed by way of remand.
Issues involved:
The judgment involves the demand of interest on differential duty paid by the appellant, the violation of principles of natural justice in passing the impugned order, and the invocation of the extended period of limitation for demanding interest on supplementary invoices. Demand of Interest on Differential Duty: The appellant, engaged in manufacturing auto parts, raised supplementary invoices due to price revisions, leading to the payment of excise duty on the differential amount. Two show cause notices were issued, demanding interest for specific periods. The adjudicating authority confirmed a total interest demand of Rs. 38,89,078 under relevant sections of the Central Excise Act, 1944. The appellant, feeling aggrieved, appealed to the Commissioner (Appeals), who upheld the original order. Violation of Principles of Natural Justice: The appellant's counsel argued that the impugned order lacked sustainability in law due to a failure to appreciate facts and law properly, along with alleged violations of natural justice principles. It was contended that the appellant was not given a hearing opportunity and was unaware of the hearing date. The counsel emphasized that the only issue was the demand of interest on differential duty, highlighting the historical uncertainty regarding interest liability on supplementary invoices under the Central Excise Act, 1944. Invocation of Extended Period of Limitation: The appellant's counsel argued against the invocation of the extended period of limitation for demanding interest on supplementary invoices, citing conflicting views on the issue during the relevant period. Reference was made to the Supreme Court's decision in Steel Authority of India Ltd. vs. CCE, Raipur, which referred the matter to a Larger Bench and was finally settled in 2019. The counsel also relied on relevant case laws and a decision of the Punjab and Haryana High Court to support the argument that interest cannot be demanded beyond the normal limitation period of one year without fraud or collusion. Decision: After considering submissions and the legal landscape, the Tribunal found that the demand of interest on supplementary invoices by invoking the extended period of limitation was not justified. It was noted that the appellant had paid the duty promptly, deposited interest under protest, and the issue of interest liability on supplementary invoices was historically uncertain. Relying on the precedent of the Punjab and Haryana High Court, the Tribunal set aside the demand, remanding the matter for re-quantification within the normal limitation period. Any excess amount paid beyond one year was to be returned to the appellant. The judgment was pronounced on 27.10.2023.
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