2015 (10) TMI 764 - AT - Central Excise

Tribunal Upheld Interest Liability on Delayed Central Excise Duty Payment

The Tribunal upheld the interest liability on delayed payment of central excise duty as compensatory, dismissing the appellant's appeal challenging the ... Demand of interest - appellant had paid the central excise duty applicable on such additional consideration, but did not pay the appropriate interest, which is relatable to late payment of the central excise duty - Held that:- Central excise duty is leviable on removal of excisable goods from the factory. As per the concept of transaction value, the amount charged over and above the sale price, should also form part of the transaction value, for the purpose of payment of central excise duty, which has been accepted by the appellant in the present case. The fact of receiving of surcharge from its customer, M/s. JSW Steel Ltd. was known to the appellant beforehand, even though the invoice was raised subsequently at the end of the year. Since the additional consideration received on account of surcharge is relatable to the goods removed from the factory on different dates, the appellant was under statutory obligation to discharge the duty liability during the relevant month, during which the goods have been removed from the factory. Since the duty liability has not been discharged within the stipulated period, the appellant is liable to pay interest on such delayed payment of duty, for the reason that interest is compensatory in character, and the recipient of the tax dues is eligible to be compensated in the form of interest, for late receipt of the duty amount. - issue regarding payment of interest is no more res integra and accordingly, I find that there is no infirmity in the impugned order - Decided against assessee. Issues:1. Liability of interest on late payment of central excise duty.2. Interpretation of additional consideration towards supply of goods.3. Applicability of interest liability based on the date of clearances of goods.4. Challenge to the adjudication order by the Revenue.5. Appeal against the order of the Ld. Commissioner (Appeals).Issue 1: Liability of interest on late payment of central excise dutyThe case involved a dispute regarding the liability of interest on late payment of central excise duty by the appellant. The Revenue contended that interest is mandatory when duty is paid beyond the prescribed time limit, and since the appellant admitted to paying the duty belatedly, interest was required to be paid as per statutory mandates.Issue 2: Interpretation of additional consideration towards supply of goodsThe appellant received surcharge from M/s. JSW Steel Ltd., which was treated as additional consideration towards the supply of goods. The appellant accepted the duty liability and discharged it at the end of the year. The central excise duty is leviable on the removal of excisable goods, and the surcharge received had a bearing on the assessable value of the goods, necessitating the discharge of appropriate central excise duty.Issue 3: Applicability of interest liability based on the date of clearances of goodsThe Revenue argued that interest liability is fastened on the appellant based on the date of clearances of goods on different dates during the year, even if the surcharge amount was received late from the customer. The duty becomes payable on the dates of goods removal, and hence, interest liability starts from those clearances.Issue 4: Challenge to the adjudication order by the RevenueThe Revenue challenged the adjudication order that dropped the show cause proceedings initiated by the Central Excise Department. The Ld. Commissioner (Appeals) accepted the Revenue's stand, setting aside the earlier order passed by the adjudicating authority, leading to the appeal filed by the appellant before the Tribunal.Issue 5: Appeal against the order of the Ld. Commissioner (Appeals)The appellant challenged the order of the Ld. Commissioner (Appeals) before the Tribunal, arguing that there was no delay in payment of duty, and therefore, no interest liability should be imposed. However, the Tribunal dismissed the appeal, citing the settled position of the law and the applicability of interest on delayed payment of duty as compensatory in nature.This judgment addressed various issues, including the liability of interest on late payment of central excise duty, interpretation of additional consideration towards supply of goods, applicability of interest liability based on the date of clearances of goods, challenge to the adjudication order by the Revenue, and the subsequent appeal against the order of the Ld. Commissioner (Appeals). The Tribunal dismissed the appellant's appeal, upholding the interest liability on delayed payment of duty as compensatory in character, based on the settled legal position and relevant case law.