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TMI Blog2024 (6) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... ants on the basis of cost of FOC materials supplied by the appellant , cost of own raw materials used by them and job charges. 2. During the course of audit of M/s. AVTEC it was noticed that the value of power units supplied by M/s. AVTEC to the appellant was undervalued which was due to the reason that the appellant had undervalued the components supplied by them to M/s. AVTEC. When the matter of undervaluation came to light, the appellant issued a supplementary invoice dated 29.06.2006 to M/s. AVTEC for Rs. 2,67,64,913/- and deposited differential duty by debiting the same in their PLA on 14.07.2006 along with the other payments while filing their monthly excise return. M/S AVTEC availed the Cenvat credit on the basis of supplementary invoice which was also disputed by the jurisdictional central excise authorities of M/s. AVTEC at their end. 2.2 The jurisdictional central excise Superintendent vide letter dated 6.6.2007, enquired the reasons from the appellants to clarify the circumstances under which the supplementary invoice for Rs. 2,67,64,913/- was issued by them when a duty equivalent to Cenvat credit taken was required to be deposited on clearance made by them under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly cleared. He further stated that M/S AVTEC take app. 10-15 days to supply the power unit after clearance of the parts to them. In support he supplied their store inventory record for some parts as evidence. He further stated that in the absence of availability of all the invoices, working out of interest on the basis of inventory report was most reasonable method. The appellant paid an additional interest of Rs. 2,86,326/- on 23.06.2011.However, the inventory report was not accepted as a valid document by the department for calculation of interest. Accordingly, a show cause notice dated 18.01.2012 was issued wherein total interest payable was calculated to be Rs. 70,54,947/- instead of Rs. 45,81,942/- which was already paid by the appellants. In the show cause notice, the interest has been worked on the basis of figures shown in the supplementary invoice which were divided into three parts (i) from start of production 1.9.2003 to 31.03.2005 (diff. duty paid Rs.1,58,08,382/-) (ii) 1.4.2005 to 30.09.2005 (Diff. duty paid 57,05,830/-) and 1.10.2005 to 31.03.2006 Rs. 47,25,898/-). For calculation of interest, whole of the differential duty paid in these respective three parts was tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat where the duty of Excise has not be levied or paid for has been short levered or short paid or erroneously refunded, the person liable to pay duty as determined under sub-section (2) of section 11 A shall in addition to the duty be liable to pay interest as per the provision of section 11 AB if and only there is determination of duty short levied or short period by the central excise officer as per provisions of section 11A(2) or the Central Excise Act 1944 duty has been paid under subsection 2B of section 11A. He further argued that demand of interest is barred by limitation as the present show cause notice is dated 18.01.2012 whereas the duty has been paid on 29.06.2006. Thus the interest has been demanded after a period of 5 years and 6 months. Therefore, the entire demand of interest and penalty is barred by limitation. He further stated that demand of interest has not been made in the prescribed time period and therefore the period of limitation for interest shall also be applicable as is applicable in case of demand duty as held by the Apex Court in the case of Commissioner vs. TVS Whirlpool Ltd. -2000 (119) E.L.T. A177 (S.C.). He also relied upon the case law of Kwality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Ltd. 2009(07) LCX0001 where the Hon'ble Apex Court has held that interest has to be paid when supplementary invoice is issued. 5. We have carefully considered the rival submissions in the matter. As regards the submission made by the Ld. Counsel that they were not required to pay duty had they adopted the procedure provided under Rule 4(5)(a) of CCR. We are not inclined to accept the same as the appellant had themselves chosen to follow the procedure under Rule 3(5) of CCR and pay duty on clearance of inputs and instead of getting the goods manufactured on job work basis they had placed a purchase order on their suppliers. As both the provisions had their own set of conditions and manners of payment of duty to be followed, we cannot accept their claim that duty and consequently interest was not required to be paid if they had followed the procedure under Rule 4(5)(a) of CCR. As far as the recalculation of interest by the department is concerned, we find that interest recalculated will directly be a direct consequence of re-determination of duty from date of clearance from September 2003 to 31.03.2006 instead of 01.04.2004 to 31.03.2006 as determined by the appellant. Re-dete ..... X X X X Extracts X X X X X X X X Extracts X X X X
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