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TMI BlogInterest on Supplementary on Volume Base Transaction.X X X X Extracts X X X X X X X X Extracts X X X X ..... Interest on Supplementary on Volume Base Transaction. X X X X Extracts X X X X X X X X Extracts X X X X ..... stomer gives me assurance for 50000 parts will be purchased every year and quotation of ₹ 10 given by us as per his assurance and a clause is mentioned in agreement that if he fails purchase less than 50000 qty. (say 40000) then the rate will be ₹ 12. and differential amount will be collected by issuing supplementary invoice, and further dispatch will continue by old rate i.e. ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. PLS GUIDE "IS INTEREST TO BE PAID ON SUCH TRANSACTIONS? " if yes then "WHY" Regards, Santosh Reply By Rajagopalan Ranganathan: The Reply: Sir, Suppose you supply 40000 pieces @ ₹ 10/- with the hope that your customer will offtake the remaining 10000 pieces also in the future. The you will charge ₹ 400000 for the goods supplied by you. If your customer does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not want to lift the remaining 10000 pieces then you will charge differential price @ ₹ 2/- per piece. In that case you will raise supplementary invoice for ₹ 80000/- When you pay duty on ₹ 80000/- you have to pay interest 0n the differential duty collected by you. In the case of COMMISSIONER OF CENTRAL EXCISE, PUNE Versus SKF INDIA LTD.[2009 (239) E.L.T. 385 (S.C.)] = 2009 (7) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 6 - SUPREME COURT it is held by the Supreme Court that "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." "It is to be noted that: the assessee was able to demand from its customers the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance of the 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 du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty 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." However Supreme Court of India has disapproved the above decision in STEEL AUTHORITY OF INDIA LTD. Versus COMMISSIONER OF C. EX., RAIPUR [2015 (326) E.L.T. 450 (S.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .)] = 2015 (12) TMI 594 - SUPREME COURT and referred the matter to a larger bench. Therefore question has not attained finality till date. X X X X Extracts X X X X X X X X Extracts X X X X
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