2018 (5) TMI 1505 - AT - Central Excise

Tribunal confirms interest on delayed excise duty payment, drops penalty for prompt payment

The Tribunal partly allowed the appeal, confirming the appellant's liability to pay interest on delayed payment of the central excise duty on PSC poles ... Valuation - Price Variation Clause - suppression of facts - demand of Interest and penalty - Held that: - the impugned order alleging suppression by the appellant is not tenable in the facts and circumstances of the case. It was a case of provisional assessment because there was a variation clause in the purchase order and on finalization of the price, the appellant paid the differential duty immediately - the assessee is liable to pay interest on delayed payment of differential duty. Penalty - Held that: - since there was no suppression on the part of the appellant and the appellant paid the duty after finalization of price, penalty not warranted. Appeal allowed in part. Issues:Appeal against rejection of appeal by Commissioner (Appeals) regarding payment of central excise duty on PSC poles supplied to KSEB without intimating the department.Analysis:The appeal was filed against the rejection of the appeal by the Commissioner (Appeals) regarding the payment of central excise duty on PSC poles supplied to Kerala State Electricity Board (KSEB) without intimating the department. The appellant, engaged in the manufacture of PSC poles, issued price escalation bills to KSEB without informing the department or paying the differential duty collected. The original authority confirmed the demand, including interest and penalty. The appellant argued that they believed duty was to be paid only after finalizing the price, which they did after settling prices with KSEB. The Tribunal found that the allegation of suppression by the appellant was not tenable as it was a case of provisional assessment due to a variation clause in the purchase order. The appellant paid the differential duty immediately upon finalizing the price. The Tribunal referred to a Supreme Court judgment stating that interest on differential duty is leviable even when paid after clearances indicate short payment of duty. Therefore, the Tribunal held the appellant liable to pay interest on delayed payment of differential duty. However, since there was no suppression and the duty was paid after finalizing the price, the Tribunal dropped the penalty imposed by the lower authorities. Consequently, the appeal was partly allowed, confirming the interest liability but dropping the penalty. The decision was pronounced on 15/03/2018.