Appeal granted, interest liability of Rs. 89,809 set aside. Duty promptly paid upon revised rates.

The Tribunal allowed the appeal, setting aside the liability to pay interest of Rs. 89,809. The decision was based on the understanding that the duty was paid promptly upon learning of the revised rates, aligning with legal principles and precedents.

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Issues Involved:
Recovery of interest on delayed payment of duty due to supplementary invoices and imposition of penalty under Central Excise Act, 1944.

Analysis:
1. The appeal was filed against the order of the Commissioner (Appeals) regarding the recovery of interest and imposition of penalty. The appellant, engaged in manufacturing Aluminium Hollow Sections, raised supplementary invoices due to price variation, leading to unpaid interest of Rs. 89,809 during August 2013 to March 2014. The Deputy Commissioner directed to recover the interest and imposed a penalty of Rs. 10,000. The Commissioner upheld the interest recovery but rejected the penalty imposition.

2. The appellant argued that the interest payment was not necessary as the goods were dispatched before the price escalation, making the Supreme Court case Commissioner of Central Excise vs. SKF India Ltd. inapplicable. The Department contended that as per Section 11A(2B), the duty must be paid based on the assessee's ascertainment, and interest under Section 11AA/11AB is applicable to such payments.

3. The Tribunal analyzed the case, noting that the appellant paid duty based on the goods' value at the time of removal and later issued supplementary invoices due to price escalation from increased costs. Referring to legal precedents like Commissioner vs. Bharat Electricals Ltd. and Steel Authority of India vs. Commissioner of Central Excise, it was established that the duty was paid promptly upon discovering the revised rates, absolving the appellant from interest liability.

4. The Tribunal concluded that the Commissioner (Appeals) erred in linking the supplementary invoice price directly to the goods' value at clearance, as the revised price agreement between parties post-clearance determines duty liability. Since the escalated price was unknown at the time of removal, the duty paid was not short levied, and interest payment was not warranted.

5. Consequently, the Tribunal allowed the appeal, setting aside the liability to pay interest of Rs. 89,809. The decision was based on the understanding that the duty was paid promptly upon learning of the revised rates, aligning with legal principles and precedents. The order was pronounced on 22nd May 2018.

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