Interest on supplementary invoice differentials upheld, while penalty was set aside on the facts.

Interest on differential amounts recovered through supplementary invoices was held payable, the liability being treated as settled against the assessee by the Supreme Court authority relied on. The demand of interest was therefore upheld. Penalty was not warranted on the facts, and the original authority's view sustaining penalty was found unsustainable, so the penalty was set aside. The appellate order was accordingly set aside and the original authority's order was restored only to the extent of interest, while the relief from penalty was maintained.

---

---

Issues: (i) Whether interest was payable on the differential amount collected through supplementary invoices; (ii) Whether penalty was warranted on the facts of the case.

Issue (i): Whether interest was payable on the differential amount collected through supplementary invoices.

Analysis: The liability to pay interest on differential amounts recovered through supplementary invoices was treated as settled against the assessee by the Supreme Court authority relied upon by the parties.

Conclusion: The demand of interest was upheld.

Issue (ii): Whether penalty was warranted on the facts of the case.

Analysis: The facts did not justify the imposition of penalty, and the original authority's view on penalty was found unsustainable.

Conclusion: The penalty was set aside.

Final Conclusion: The appellate order was set aside and the original authority's order was restored only to the extent of interest, while the penalty relief granted by the original authority was maintained.

---