INTEREST FOR INCREASE IN PRICE WITH RETROSPECTIVE EFFECT, Central Excise

[SUPRAKASH MITTRA]

An excisable product is cleared regularly on payment of Central Excise Duty. A memorandum of understanding (MOU) is signed between of buyer & seller on 21/01/2012 wherein the price of the product is increased from restrospective effect from 01/04/2011.

Differential billing is done for the increased price & central excise duty on the same is paid. The department has raised a demand for interest u/s 11A/11AA of central Excise Act,1944. on the differential amount from 01/04/2011 treating the it to be short payment of central excise duty. 

Is the claim of the department justified as the the increase in price is from retrospective effect?

Though the Hon'ble Supreme Court in the case of CCE Vs SKF India Ltd. (2009 (7) TMI 6 - SUPREME COURT)= 2009 (239) ELT 385 (SC) held that interest is payable.

central Excise Act has undergone a lot of changes in this regard after the Yr. 2009. Please give some valuable suggestions in this regard 

Posts / Replies

[Pradeep Khatri]

Yes, you are liable to pay the interest on the price movement upward retrospectively.

[Sanjay Sharma]

Interest is payable in this case there is no run away.

Regards,

Sanjay Sharma