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TMI Blog2015 (8) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... differential amount of duty is ascertained consequent to the finalisation of assessment, the due date for payment of such amount never changes nor is extended. It would always relate to the date of removal of the goods thereof. It is only the quantification of the differential amount of duty is ascertained consequent to the finalisation of assessment, and that too merely because the assessee was not able to ascertain the exact quantum of duty in the absence of sufficient material to finalize the valuation of the goods at the time of clearance of goods. The due date for payment of duty is statutorily fixed being the date of removal of the goods consequent to the manufacture thereof and the same cannot be changed. Further, Rule 7(4) clearly provides that the assessee shall be liable to pay interest on any amount payable to the Central Government consequent to an order being passed for finalisation of assessment under sub-rule (3) at the rate specified by the Central Government by a Notification issued under Section 11AA or Section 11AB of the said Act from the first day of the month succeeding the month for which such amount is determined till the date of payment thereof. The prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed value. After the finalisation of the prices, the appellant raised invoices and paid the differential rate of duty and submitted the relevant documents for finalisation of the provisional assessments. It is alleged that the jurisdictional authority, without affording any opportunity, passed the final assessment order holding that even though no further duty was payable but held that the appellant was liable to pay interest on the differential duty under Section 11AB of the Central Excise Act, 1944 (hereinafter referred to as the Act). The appellant, being aggrieved filed an appeal, which was dismissed against which further appeal was filed before the Tribunal. The Tribunal after considering the matter dismissed the appeal. The appellant, still aggrieved, has filed the present appeal. We have heard Sri Z.U. Alvi along with Sri A.P. Mathur and Sri Abhishek Mishra, the learned counsel for the appellant and Sri Amit Mahajan, the learned counsel for the department. The question of law that arises for consideration is, Whether the appellant is liable to pay interest on differential duty even though the differential duty, if any, was paid, prior to the date of the passing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment really determines whether the levy is short and complete, consequently, contended that duty becomes payable only when there is a final assessment and if duty has already been paid on or before the date of final assessment, the question of paying interest on differential right of duty does not arise. In support of his submission, the learned counsel placed reliance upon a decision of the Supreme Court in Commissioner of Central Excise and Customs, Mumbai Vs. I.T.C. Ltd., 2006 (203) ELT 532 wherein it was held that the question as to non-levy or short levy of an excise duty would arise only when the levy had been laid in accordance with law. It was contended that when the duty is levied it becomes payable, which in turn becomes legally recoverable. It was contended that the amount becomes payable only in the event, the assessee does not deposit the amount levied as per the order of assessment. In the light of the aforesaid decision, the learned counsel contended that the power under Section 11A of the Act could be invoked only when a duty is not levied or paid or has been short levied or short paid and that such proceedings could be initiated within six months from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher prices by virtue of retrospective revision of the prices. It, therefore, follows that at the time of sale the goods carried a higher value and those were cleared on short payment of duty. The differential duty was paid only later when the assessee issued supplementary invoices to its customers demanding the balance amounts. Seen thus it was clearly a case of short payment of duty though indeed completely unintended and without any element of deceit etc. The payment of differential duty thus clearly came under sub-section (2B) of Section 11A and attracted levy of interest under Section 11AB of the Act. The learned counsel also relied upon a decision in Commissioner of Central Excise Vs. International Auto, 2010 (250) ELT 3, wherein the Supreme Court held that from the scheme of Section 11A (iib) and Section 11B it is apparently clear that interest is levied for loss of revenue on any count. The Supreme Court held that the differential price signifies that value, which is the function of the price, on the date of removal/clearance of the goods. The Supreme Court held that the differential duty paid after the date of clearance, indicates short payment/ short levy on the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of law. We however, have to refer to certain provisions of Central Excise Rules, 2002, which have been framed in exercise of the powers conferred by Section 37 of the Central Excise Act, 1944. For facility, Section 37(1) (ibb) of the Act provides as under:- Section 37. Power of Central Government to make rules. - (1) The Central Government may make rules to carry into effect the purposes of this Act. ........ (ibb) provide for charging or payment of interest on the differential amount of duty which becomes payable or refundable upon finalisation of all or any class of provisional assessments. The aforesaid provision clearly provides that the Central Government may make rules including rules conferring powers to provide for charging of interest on the differential amount of duty, which becomes payable or refundable upon finalisation of all or any class of provisional assessment. The provision of law comprised there-under nowhere specifies such Rules shall restrict the levy of interest for the period consequent to the finalisation of the assessment, rather it specifies that the Rules may provide for interest on the differential amount of duty becoming payable co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was unable to determine the value excisable goods he may request the Assistant Commissioner or Deputy Commissioner as the case may be for payment of duty on a provisional basis. Provisional assessment order would be passed under sub-Rule (2 )of Rule 7 of the Rules and, thereafter, a final assessment order would be passed under sub-Rule (3). Sub-Rule (4) provides for payment of interest consequent to order for final assessment under sub-Rule (3) at the rate specified from the first day of the month succeeding the month for which such amount is determined till date date of payment thereof. For facility, Rule 7 is extracted hereunder: Rule 7. Provisional assessment. -- (1) Where the assessee is unable to determine the value of excisable goods or determine the rate of duty applicable thereto, he may request the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in writing giving reasons for payment of duty on provisional basis and the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, may order allowing payment of duty on provisional basis at such rate or on suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the buyer, if he had not passed on the incidence of such duty to any other person. In SKF India Ltd. (supra) the Supreme Court held : The payment of differential duty by the assessee at the time of issuance of supplementary invoices to the customers demanding the balance of the revised prices clearly falls under the provision of sub-section (2B) of Section 11A of the Act. Similarly, in International Auto Ltd. (supra) the Supreme Court held that merely because the differential amount of duty was ascertained subsequent to the date of clearance, the due date of payment of duty never changed nor was it extended and that the differential rate of duty is relatable to the date of removal of goods. The expression for as provided under Rule 7(4) of the Rules of 2002 refers to the month for which the amount is determined pursuant to the finalisation of assessment and hence, interest liability would commence from the month succeeding the month for which the duty was due and payable in relation to the goods cleared. In the light of the aforesaid, we are of the view that interest is leviable even where differential duty was paid prior to the finalisation of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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