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TMI Blog2024 (8) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... d indue course of clearance to their other related interconnected undertaking, obviously for the reason that the said Unit has already availed credit on the excess amount paid. Therefore, to ascertain the interest payable on the differential short paid on finalization of the provisional assessment for the Financial years 2008-09 2009-10, in the light of the judgments of Hon ble Supreme Court in Steel Authority of India Ltd., the matter needs to be remanded to the adjudicating authority for calculation of interest. The impugned orders are modified and the appeals are disposed of by way of remand to the adjudicating authority. - DR. D.M. MISRA, MEMBER (JUDICIAL) AND MRS R BHAGYA DEVI, MEMBER (TECHNICAL) Mr. N. Anand, Advocate, for the Appellant Mr. H. Jayathirtha, Superintendent (AR), for the Respondent ORDER These two appeals are filed against respective Orders-in-Appeal passed by Commissioner of Central Excise(Appeals); since involved common issues, are taken up together for hearing and disposal. 2. Briefly stated the facts of the case the appellant had requested for provisional assessment of the goods i.e. OE parts such as Front Axle, Rear Axle, Propeller Shaft, Stiffener etc. m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise Rules, 2002. The Appellant s request for provisional assessment was permitted in terms of Rule 7 of the CER, 2002. Subsequently, the Appellant furnished all the necessary details and documents for finalisation of the value of goods and they also voluntarily paid the differential duty payable on the finalized value as voluntarily computed by them. In respect of some of the goods, the Appellant had paid excess duty provisionally but they did not seek refund of the same. The lis in both the appeals relates to demand of interest under rule 7(4) of the CER, 2002 on finalisation of provisional assessment. It is submitted that the Department has ordered demand of differential duty payable u/r 7 of the CER, 2002 r/w Section 11A and also interest payable on the entire differential duty payable without adjusting the excess duty paid on other goods u/r 7(4) of the CER, 2002. It is the Appellant s contention that upon finalisation of provisional assessment order it is the cumulative effect which had to be considered while demanding interest u/r 7(4) of the CER, 2002. In other words, the demand of interest u/r 7(4) can only be on the net difference i.e., after adjusting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zation of the provisional assessment. Also, they undertook not to claim any excess duty paid which was refundable by the Department for the said Financial Years. Pursuant to the said declaration and undertaking furnished by the appellant, the assessment was finalized by the adjudicating authority. As the appellant had undertaken not to claim any refund, the adjudicating authority confirmed the demand of duty short-paid and the duty already paid appropriated which has been upheld by the Commissioner(Appeals). Since they were not eligible for refund, the same was not discussed in the orders. Since the appellant paid the differential duty but failed to discharge interest on the delayed payment of duty, the interest was demanded in terms of Section 11AB of Central Excise Act, 1944 read with Rule 7(4) of the Central Excise Rules, 2002. In support, the learned AR for the Revenue referred to the judgment of the Hon ble Supreme Court in the case of Steel Authority of India Ltd. Vs. CCE, Raipur [2019(366) ELT 769 (SC)]. He has also referred to the judgment of Hon ble Allahabad High Court in the case of Bharat Heavy Electricals Ltd. Vs. CC CE, Kanpur [2015(323) ELT 417 (All.)]. 4.1 Distingui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be determined to arrive at the cost of the products applying CAS4 method at the time clearance of their good to their related concern. For the respective Financial Years 2008-09 2009-10, they have filed CAS4 certificates certified by a Cost Accountant declaring the cost of production and requested for finalization of the assessment. The Department proposed to add the value of the royalty charges paid to the overseas company for technical know-how which on assessment added and the duty liability was calculated on the reassessed value. The appellant before finalization of assessment paid the differential duty and wrote to the department that they would not be seeking refund of duty excess paid during certain period. 7. In the present appeals, they have only contested the levy of interest on the duty calculated to be short-paid and appropriated against their payment. It is the contention of the appellant that they have resorted to provisional assessment on various parts during the said Financial Years and in certain cases, they have paid excess duty and in certain cases, they have paid less duty resulting into short-payment. It is their argument that the duty excess paid adjus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The assessee was fully conscious of the fact that it was subject to variation. Assessee must be imputed with knowledge that the value it was declaring was amenable to upward revision. The circumstances were indeed clearly both apposite and appropriate for the assessee to invoke the provisions of Rule 7 and seek an order for provisional assessment. In fact, take the example of manufacturer A and manufacturer B. Both remove goods under contracts which contain escalation clauses. Manufacturer A invokes Rule 7. It seeks permission for removal of goods on provisional assessment. Though an order of final assessment has to be passed within a period of time it is capable of being extended without any time-limit. Manufacturer-A on the basis of upward revision of the price with retrospective effect and acknowledging the value to be the value as provisionally assessed and as enhanced by the escalation arrived at under the escalation clause pays the duty when the escalation comes into effect on the difference in the value under Rule 7. Apart from payment of the differential excise duty manufacturer A becomes also liable to pay interest from the date when the escalation would come into play ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the duty is payable under the Rules made under the Act. Thus, if goods are removed in the month of January ordinarily payment must be made by the 6th of February. If the duty is not paid by the 6th of February, Section 11AB must be understood as mulcting the assessee with liability to pay interest from the first day of March in the example we have given. If the assessee went in for provisional assessment under Rule 7, it becomes liable from the 1st day of the month following the month for which the amount is determined. 63 . We are of the view that the reasoning of this Court in the order referring the cases to us (to this Bench) that for the purpose of Section 11AB, the expression ought to have been paid would mean the time when the price was agreed upon by the seller and the buyer does not square with our understanding of the clear words used in Section 11AB and as the rules proclaim otherwise and it provides for the duty to be paid for every removal of goods on or before the 6th day of the succeeding month. Interpreting the words in the manner contemplated by the Bench which referred the matter would result in doing violence to the provisions of the Act and the Rules which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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