Assessee Liable for Interest on Differential Duty Paid Post Clearance

The Appellate Tribunal CESTAT, Bangalore held that the assessee is liable to pay interest under Section 11AB of the Central Excise Act on the differential duty paid under supplementary invoices issued after goods clearance. Citing precedents from the Supreme Court and High Court, the Tribunal affirmed the liability of the assessee to pay interest on the differential duty amount. The appeal was dismissed, emphasizing the obligation of the assessee to pay interest in such circumstances.

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Issues: Liability to pay interest under Section 11AB of the Central Excise Act on the differential amount of duty paid under supplementary invoices after goods clearance.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Bangalore dealt with the question of whether the assessee is liable to pay interest under Section 11AB of the Central Excise Act on the differential amount of duty paid under supplementary invoices issued after the clearance of goods. The goods were initially cleared on payment of duty based on the originally agreed price. Subsequently, the assessee invoked a price escalation clause in the agreement and issued supplementary invoices to recover the differential price and pay the differential duty after negotiations with the buyers. The issue arose regarding the payment of interest under Section 11AB from the date of goods clearance to the date of payment of differential duty.

The Tribunal referred to the judgments of the Hon'ble Supreme Court in Commissioner Vs. SKF India Ltd. and Commissioner Vs. International Auto Ltd., which settled a similar issue in favor of the Revenue. The Supreme Court held that interest was indeed liable to be paid under Section 11AB on the differential amount of duty paid by the assessee under supplementary invoices. This position was further affirmed by the Hon'ble High Court in Commissioner Vs. Presscom Products. The Tribunal, therefore, concluded that the respondent was bound to succeed based on the case law cited by the learned DR and dismissed the appeal.

In summary, the judgment clarified the liability of the assessee to pay interest under Section 11AB of the Central Excise Act on the differential amount of duty paid under supplementary invoices issued after the clearance of goods, in line with the precedents set by the Supreme Court and the High Court in similar cases.

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