CESTAT Chennai: Assessees liable for interest under Section 11AB on differential duty paid post-clearance. The Appellate Tribunal CESTAT CHENNAI held that assessees are liable to pay interest under Section 11AB of the Central Excise Act, 1944 on differential ...
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CESTAT Chennai: Assessees liable for interest under Section 11AB on differential duty paid post-clearance.
The Appellate Tribunal CESTAT CHENNAI held that assessees are liable to pay interest under Section 11AB of the Central Excise Act, 1944 on differential duty paid due to price escalation after goods clearance through supplementary invoices. The Tribunal followed the precedent set by the Supreme Court in a similar case, ruling that interest is payable on such differential duty payments but penalties should not be imposed. The Tribunal upheld the demand for interest while setting aside any penalties, disposing of all appeals accordingly.
Issues involved: Whether assessees are liable to pay interest under Section 11AB of the Central Excise Act, 1944 on differential duty paid due to price escalation after goods clearance by raising supplementary invoices.
Analysis: The judgment by the Appellate Tribunal CESTAT CHENNAI dealt with the common issue of whether assessees are required to pay interest under Section 11AB of the Central Excise Act, 1944 on the differential duty paid following price escalation post goods clearance through supplementary invoices. The learned counsels representing the assessees argued that in some instances, penalties were also imposed in addition to interest. The Tribunal referred to a precedent set by the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Pune Vs SKF India Ltd., where it was established that the payment of differential duty at a later stage constitutes a short-payment of duty during clearance, necessitating the payment of interest under Section 11AB of the Central Excise Act, 1944. The Supreme Court specifically reinstated the order for interest payment by the Assistant Commissioner and clarified that penalties should not be imposed in such cases. Accordingly, the Tribunal, in line with the Supreme Court's decision, upheld the demand for interest while setting aside any penalties imposed. The judgment concluded by disposing of all appeals from both the assessees and the department based on the aforementioned terms.
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