Central excise query - rate diffrence in excise invoice

[Asked by Guest]

Dear sir,

we had supplied some kg during the time of April -14 to June 14, after we examine that we are wrong basic amount in the invoice so we raise supplementary invoice for the difference amount in July -2014 but our party has not considering the supplementary invoice. because quarter has been end.

but we require the differential amount the party? so pls. advise how can i claim this amount from the party.

Pls. give your opinion on the issue with supporting rules, regulation, case law etc.

[PAWAN KUMAR]

Dear sir,

Invoice can be issued as supplimentary invoice for the price variatioin whether from Higher side or lower side. Please prepare an annexure of details of invoices issued during April'2014 to June'2014 on which price was wrongly charged and actual charged with difference also. Prepare the invoice and support the annexure. Pay the duty during the month of issuing of invoice and also work out the applicable interest.

Dear sir, thanks for the reply. we have paid the duty amount through supplementary invoice. now we want to collect that differential amount from them but they are not giving us that differential amount and i want to this amount from them

[YAGAY and SUN]

Dear Nitin,

You have all legal rights and remedies to recover this amount which was earlier calculated on inadvertent basis due to human error.

On every invoice there is mention of Mercantile law's term i.e. error of omission and error of commission and if any error occurs due to these aspect, then, no person can take undue benefit out of such error as even constitution of India does not allow unjust enrichment by such silly errors or mistakes.

You have following remedies, namely:-

1. Please check whatever you are claiming in the Supplementary Invoice, is as per the terms and conditions of the PO/Agreement/Contract/MOUs.
2. Send them e-mails, reminder letters, fax and SMS etc.
3. Call them or have a talk with their, MD, CEO, CFO, COO i.e. Top Management.
4. Write an e-mail or letter to their marketing head about this overdue/outstanding amount.
5. Ask your Marketing head/CEO/MD to have a joint meeting with them to discuss each and every aspect of this matter for the purpose of resolving it.
6. Ask them, that if they won't pay, then, you may black list their organization within India or world wide (as per the status of your organization) and this very message would be posted on your Organization's website.
7. If all these actions do not work and send a legal notice but after having discussions/e-mails/reminders once again duly sent by your law department.
8. You may also seek the resolution of this matter by appointing an arbitrator through you law department.

Please try these methods (stepwise) to recover the differential amount but the most important thing is to bring this matter in the very knowledge of your 'Top Management' immediately and also involve them.

Regards,

YAGAY and SUN

(Management and Indirect Tax Consultants)

[Mahir S]

Dear Nitin ji,

No one told you to raise invoice for a lesser amount and then issue supplementary invoice after completion of the quarter.

It would be better on your part to settle the issue amicably with the party.

You may hire a legal advisor on the issue.

[Mahir S]

Nitinji,

First of all, do pay up the interest amount for the supplementary invoices issued by your company.

The interest is to be calculated from the date of issue of the original invoice

[YAGAY and SUN]

Dear Nitin,

In addition to the Mr. Naveed's reply, it is pertinent to mention here that you would not eligible to recover the interest portion from your customer, since, it would be paid due to your inadvertent mistake to issue a invoice on lower price without considering the price mentioned in the PO/Agreement/Contract/MOUs.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

[PAWAN KUMAR]

Dear Sir,

Only you can recover differential amount not the interest. For the purpose of getting recovery of differential amount, please review your purchase order/agreement with the party where price variation clause. Please discuss as per that clause with the party to allow reimbursement of differential amount.

AI Summary

Recovery of Price Differential: supplier may claim undercharged amounts but generally cannot recover interest arising from its billing error.
Supplier may recover the price differential arising from an inadvertent undercharge by issuing a supplementary invoice and paying duty; however, interest incurred due to the billing error is generally not recoverable from the buyer. Before claiming recovery, verify the purchase order/agreement and any price variation clause, prepare a detailed annexure of affected invoices, and pursue remedies through commercial negotiations, formal communications, legal notice, or arbitration while maintaining tax compliance and documentation.