2008 (7) TMI 278

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..... None for the Respondent. [Order per : D.A. Mehta, J. (Oral)]. - The appellant-revenue has proposed the following question: "Whether in the facts and circumstances of the case the Tribunal erred in holding that no interest as prescribed under the provisions of Section 11AB of the Act can be recovered when the differential duty is paid on price variation?" 2. The facts briefly stated are that the respondent-assessee is manufacturing goods which are liable to duty of excise under The Central Excise Act, 1944 (the Act). It is the case of the appellant department that the respondent-assessee had issued supplementary invoices for rate difference on the basis of escalation clause in the purchase order and such supplementary invoices wer .....

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..... L-173-CESTAT-BANG. 3. Learned advocate for the appellant has referred to provisions of Section 4 of the Act to point out that duty of excise is chargeable on any excisable goods with reference to the value of such goods, on each removal of the goods and for the purposes of working out the value on which such duty is leviable transaction value thereof is defined to mean the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to the assessee, or by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time. Therefore, according to the learned counsel, the Tribunal had committed an error in l .....

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..... n. 5. If at the given point of time when the transaction took place the additional price was not fixed, the liability of the buyer to pay the additional amount was not known to the buyer, mere existence of an escalation clause in the contract between the parties cannot bring the subsequent escalation within the meaning of the definition for the purposes of levying interest. Duty of excise would become payable even subsequently in point of time and that is the admitted position between the parties, the respondent-assessee having already discharged that liability. 6. Section 11AB of the Act itself says that interest is to be paid on the amount short paid from the first date of the month succeeding the month in which the duty ought to .....

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