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TMI Blog2018 (7) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise duty is reached. This was done on regular basis and it was also supported by the cost accountant certificates at times. The appellant this way manufactured components/parts and paid appropriate central excise duty on clearances of such components/parts to M/s FIPL. During the departmental audit of the appellants tax related documents on 18th to 22nd November 2013, it transpired that landed cost of raw materials supplied free of cost was enhanced by M/s FIPL from 2010-2011 upto November 2013, however, the assessable value of the components/parts supplied to M/s FIPL was not enhanced for payment of Central Excise duty. On being pointed out, the appellant agreed to the objection raised by the departmental audit team and paid a differential amount of central excise duty amounting to Rs. 11,73,19,961/- alongwith interest of Rs. 2,22,59,936/- on 21st November, 2013. 2. A show cause notice dated 21st November 2014 was issued to the appellant for demanding and appropriation of the above-mentioned amount of central excise duty alongwith interest deposited by them and the show cause notice also proposed to impose a penalty under Section 11AC of Central Excise Act, 1944. The show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d are as follows :- (a) Hind Auto Pvt. Ltd. Vs. CCE & ST, Ranchi Final order No. FO/A/75566-75570/2015 dated 28/09/2015 (b) CCE vs. Maharashtra Scooters Ltd. - 2009 - TIOL - 722 - CESTAT - MUM. (c) CCE vs. Tata Motors - 2009 (237) E.L.T. 147 (Tri. - Kol.) 5. It has also been argued that in this case no show cause notice should have been issued to the appellant as duty and interest was paid by them on the spot while audit party has pointed out the price revision and much prior to issue of the impugned show cause notice. It has also been contested that the interest was also not payable by them when the time bar demand has been paid voluntarily by them. 6. We have also heard the Departmental Representative who has reiterated the findings of the order-in-original. 7. We find that there is no denial of the fact that M/s FIPL has revised the value of free of cost raw material supplied by them to the appellant retrospectively and since the value of F.O.C. raw materials was the basis for determination of assessable value of the manufactured products for payment of central excise duty. It was the responsibility of the appellant to revise the price of his manufactured products as so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t accountant certificate and also stated that they are paying the differential amount of Central Excise duty which will be chargeable from M/s FORD India Pvt. Ltd. 10. The learned Counsel appearing for the appellant has taken us through these correspondences. We also note that there might have been revision of value of F.O.C. products during the relevant period between 2010-2011 to 2013-2014 however, it is strikingly clear that the appellant came to know that the value of free of cost products supplied by M/s FORD India Ltd. has got further upward revision only when the audit party asked for cost accountant certificate and later when same was procured from M/s F.I.P.L. 11. Now we need to see in view of above facts whether the appellant has willfully done certain proactive acts which can lead to the invocation of elements such as fraud, collusion, willful misstatement or suppression of facts under Section 11AC. We find that the appellant was not in a situation of control in this case and revision of prices of his manufactured product, squarely depended on M/s F.I.P.L. providing the correct value of their F.O.C. components. As soon as the appellant came to know that the value of F. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- "10. Sub-section (2B) of Section 11A provides that the assessee in default may, before the notice issued under sub-section (1) is served on him, make payment of the unpaid duty on the basis of his own ascertainment or as ascertained by a Central Excise Officer and inform the Central Excise Officer in writing about the payment made by him and in that event he would not be given the demand notice under sub-section (1). But Explanation 2 to the sub-section makes it expressly clear that such payment would not be exempt from interest chargeable under Section 11AB, that is, for the period from the first date of the month succeeding the month in which the duty ought to have been paid till the date of payment, of the duty. What is stated in Explanation 2 to sub-section (2B) is reiterated in Section 11AB that states where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person who has paid the duty under sub-section (2B) of Section 11A, shall, in addition to the duty, be liable to pay interest .......It is thus to be seen that unlike penalty that, is attracted to the category of cases in which the non-payment or short pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en, inter alia, held, as can be seen from the above-quoted paragraphs, that sub-section 2(B) of Section 11A provides that the assessee in default may make payment of the unpaid duty on the basis of his own ascertainment or as ascertained by a Central Excise Officer and, in that event, such assessee in default would not be served with the Demand Notice under Section 11A(1) of the Act. However, Explanation (2) to the sub-section makes it clear that such payment would not be exempt from interest chargeable under Section 11AB of the Act. What is stated in Explanation (2) to sub-section 2(B) is reiterated in Section 11AB of the Act, which deals with interest on delayed payment of duty. From the Scheme of Section 11A(2B) and Section 11AB of the Act, it becomes clear that interest is levied for loss of revenue on any count. In the present case, one fact remains undisputed, namely, accrual of price differential. What does differential price signify? It signifies that value, which is the function of the price, on the date of removal/clearance of the goods was not correct. That, it was understated. Therefore, the price indicated by the supplementary invoice is directly relatable to the value ..... X X X X Extracts X X X X X X X X Extracts X X X X
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