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of <h1>High Court clarifies Rule 173G interpretation on duty payment & interest, Section 11AA prospective</h1> <h3>Commissioner of Central Excise, Bangalore Versus M/s. Araco Automative India Pvt. Ltd.</h3> Commissioner of Central Excise, Bangalore Versus M/s. Araco Automative India Pvt. Ltd. - 2015 (321) E.L.T. 229 (Kar.) Issues:1. Interpretation of Rule 173G regarding payment of interest on differential duty.2. Applicability of Rule 173G(1)(d) in cases of supplementary invoices and reclassification of goods.3. Effect of the amendment inserting Section 11AA in the Central Excise Act on the present case.Analysis:1. The main issue in this case was the interpretation of Rule 173G concerning the payment of interest on differential duty. The Tribunal held that Rule 173G refers to the payment of duty on a fortnightly basis approved by the Commissioner under Rule 47. Failure to deposit duty as per Rule 173G(1) would result in the payment of interest as specified in Rule 173G(1)(d). The due date mentioned in the rule pertains to the payment determined and approved by the Commissioner for fortnightly payments.2. The Tribunal further analyzed the applicability of Rule 173G(1)(d) in cases involving supplementary invoices and revision of duty rates due to reclassification of goods. It was noted that there was no provision in Rule 173G for the payment of interest in such circumstances. As a result, the Tribunal concluded that in the absence of a legal provision to charge interest in these situations, the provisions related to the failure to pay fortnightly payments under Rule 173G(1)(d) could not be invoked. Consequently, the appeal was allowed, and the levy of interest was set aside.3. The judgment also addressed the effect of the amendment introducing Section 11AA in the Central Excise Act. The amended section mandated the payment of interest in addition to duty under specific circumstances. However, the court noted that this provision was prospective and did not apply to the period before 08.04.2011, which was the relevant period in this case. As there was no provision for levying interest on duty paid after the determination of a dispute during the relevant period, the Tribunal's decision was upheld. The court found no error in the Tribunal's order and dismissed the appeal.In conclusion, the High Court upheld the Tribunal's decision, emphasizing the interpretation of Rule 173G, the inapplicability of Rule 173G(1)(d) in certain scenarios, and the non-retrospective nature of the amendment introducing Section 11AA in the Central Excise Act.
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