2012 (11) TMI 356 - AT - Central Excise

Interest payable on delayed duty payment via supplementary invoices under Central Excise Act.

AREVA T&D INDIA LTD. Versus COMMISSIONER OF CENTRAL EXCISE, LTU, CHENNAI

The judgment held that interest is payable for delayed payment of duty on amounts realized through supplementary invoices. The adjudicating Commissioner ... Interest - supplementary invoices - price revision - appellants had raised supplementary invoices on their OE customers on account of price revision of goods supplied to them with retrospective effect – Held that:- Appellants had discharged Central Excise duty on such supplementary invoices, but they had not paid any interest on such differential duty eventhough the price revision pertained to clearances made much earlier to the date of raising such supplementary invoices - assessee was liable to pay interest for duty paid after clearance of goods, eventhough the non-payment was not intentional. Decision of Apex Court in Commissioner v. SKF India Ltd. [2009 (7) TMI 6 - SUPREME COURT] followed. Issues:1. Whether interest is payable for delayed payment of duty on amounts realized through supplementary invoices.Analysis:The judgment dealt with the issue of whether interest is payable for delayed payment of duty on amounts realized through supplementary invoices. The adjudicating Commissioner held that interest in respect of delayed payment of duty is chargeable, citing a decision of the Hon'ble Supreme Court in a specific case. The case involved the appellants raising supplementary invoices on their OE customers due to a price revision of goods supplied with retrospective effect. The appellants discharged Central Excise duty on these invoices but did not pay interest on the differential duty, even though the price revision related to clearances made much earlier. The department issued show-cause notices demanding interest under Section 11AB of the Central Excise Act, 1944. The judgment referenced the Supreme Court's interpretation of Sections 11A, 11AA, 11AB, and 11AC, highlighting that interest is leviable on delayed or deferred payment of duty for various reasons. The judgment emphasized that the payment of differential duty by the assessee upon issuing supplementary invoices falls under the provision of sub-section (2B) of Section 11A of the Act.2. Application of precedent and conflicting decisions:The judgment also discussed the application of precedent and conflicting decisions. It referenced a decision by the Bombay High Court, Aurangabad Bench, which opined that Section 11AB does not apply when the duty is paid immediately upon learning about the upward revision of prices of goods sold earlier. However, the judgment disagreed with this view, stating that the payment of differential duty upon issuing supplementary invoices constituted a case of short payment of duty, attracting the levy of interest under Section 11AB. The judgment further mentioned a decision of the Hon'ble Karnataka High Court, distinguishing its earlier ruling and following the Supreme Court's decision in a specific case, holding that interest is payable for duty paid after the clearance of goods, even if the non-payment was unintentional. The judgment concluded that the appellants did not have a case in their favor, dismissing their appeal and upholding the order of the original authority.In summary, the judgment clarified the liability to pay interest for delayed payment of duty on amounts realized through supplementary invoices, citing relevant legal provisions, precedent cases, and differing interpretations by various high courts.