2017 (4) TMI 1082 - HC - Central Excise

Court upholds Tribunal decision on interest payment commencement date under Central Excise Act.

M/s. Visteon Automotive Systems (India) Private Limited Versus The Additional Commissioner of Central Excise, The Commissioner of Central Excise (Appeals), Customs, Excise, and Service Tax Appellate Tribunal

The Court dismissed the appeals challenging the final order passed by the Tribunal regarding the commencement date for payment of interest under Section ... Period for payment of interest u/s 11 AB of the CEA, 1944 - interest on differential duty on additional amount received - price escalation clause - Department, seeks payment of interest in the form of compensation, for the period commencing from the date, when, duty was first paid on the original price of the goods till the period ending with, when duty once again upon receipt of additional consideration by the appellant - Held that: - the decision rendered in the case of S.K.F. India Limited, [2009 (7) TMI 6 - SUPREME COURT], still holds the field and therefore would be binding on this Court, under Article 141 of the Constitution of India - having regard to the fact, that the said decision has been referred for reconsideration to a Larger Bench, we are inclined to dismiss the appeals, with the liberty to the appellant to revive the same - appeal disposed off. Issues involved:Challenge to final order dated 04.03.2010 passed by the Customs, Excise and Service Tax Appellate Tribunal, Chennai under Section 35 G of the Central Excise Act, 1944 regarding the commencement date for payment of interest under Section 11 AB of the Act.Analysis:Issue 1: Commencement date for payment of interest under Section 11 AB of the Central Excise Act, 1944The appeals filed challenge the final order passed by the Tribunal, focusing on the date from which the period for payment of interest under Section 11 AB of the Central Excise Act, 1944 would begin. The appellant had initially paid excise duty on the manufactured goods at the time of removal. Subsequently, the appellant raised supplementary invoices on customers and received additional consideration, on which excise duty was also paid. The Department seeks interest as compensation from the date of the first duty payment on the original price until the duty was paid again upon receiving additional consideration.Issue 1.1: Precedents and Legal ReferencesThe appellant's counsel concedes that the issue is covered against the appellant based on a decision by the Supreme Court in the case of Commissioner of Central Excise, Pune Vs. SKF India Limited, 2009. It is noted that the decision in the SKF India Limited case has been referred to a Larger Bench following an order in the case of Steel Authority of India Limited Vs. Commissioner of Central Excise, Raipur, 2015. However, as of the judgment date, no decision had been rendered by the Larger Bench.Issue 1.2: Court's DecisionThe Court, after considering the submissions from both counsels, acknowledges that the decision in the SKF India Limited case is still binding under Article 141 of the Constitution of India. Despite the reference to a Larger Bench, the Court decides to dismiss the appeals but grants the appellant the liberty to revive them after the decision in the Steel Authority of India Limited case is made, provided it is in favor of the Assessee. The appeals are disposed of with this observation, directing them to be consigned to record, and closing the pending applications without any order as to costs.