AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (6) TMI 396
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....ment to Indian Railways under contracts and such supplies are subject to price variation clause. The final contractual price is determined after indices of major materials, labour for the relevant month prior to the contractual delivery dates are available and thus nearly after some months consequent to the supply or execution of the contract that the final contractual price rates are computed and are accordingly, paid. The goods at the time of dispatch are billed provisionally on the previously approved price and the excise duty is accordingly paid. On receipt of Railway Board approval to the final price, adjustment bills are raised and consequently, supplementary invoices are issued and differential duty, if any, is paid and thus, the assessments are finalised. Similarly, in relation to the period from 1.4.2002 to 31.3.06, the assessmenst came to be finalised and on account of delayed payment of duty, the appellants were compelled to pay the interest amounting to Rs.13,49,08,554/-. The present appeal seeks to challenge the said liability to pay interest on the delayed payment of duty. 3. Learned Advocate for the appellants while assailing the order relating to the fixatio....
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....required for finalising assessment is made available but within a period not exceeding six months from the order of the communication of the order of provisional assessment provided that on sufficient cause being shown by the assessee and the reason being recorded in writing ,the Commissioner may extend the said period, not exceeding six months, and the Chief Commissioner may extend such period as he may deem fit. 6. The provisions of law comprised under Rule 7(3), therefore, nowhere provides for any show cause notice as such to the assessee prior to finalisation of the assessment. However, since the proceedings before such authority are in the nature of quasi-judicial, it is certainly expected that the authority substantially complies with the requirements of the principles of natural justice. 7. It is however, to be noted that the principles of natural justice do not necessarily require show cause notice in each and every case. The requirement of the notice would depend upon the facts of each case and in the absence of specific provision requiring issuance of such notice, there would be no obligation for the authority to issue a show cause notice in each and every....
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....ck of the assessee. A satisfactory determination can only be made by giving all information to the assessee after giving the assessee an opportunity of establishing his own point of view or checking and or challenging any material or evidence upon which the Excise authorities wish to depend . There was no appeal filed against such order of the High Court and it had attained finality and was binding upon the parties. In the background of the said facts when fresh notice was issued by the Department, its validity was being considered by the Apex Court. While dealing with the same in para 16, 20 and 21 of their judgment, the Apex Court observed as under: 16. It will be noticed that in Chapter III, the term? assessment was used only in the former Rule 10-B corresponding to the present Rule 9-B, while dealing with provisional assessment of duty. But Rule 52 shows that an assessment is obligatory before every removal of manufactured goods. The rules, however, neither specify the kind of notice which should precede assessment nor lay down the need to pass an assessment order. All we can say is that rules of natural justice have to be observed for, as was held by this Court in K.T....
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....re, the provisionally assessed duty can by no means be termed as short-payment of duty since at the time of clearance of goods there was provisional assessment by the competent authority after examination of the material facts and ascertainment as to whether the duty paid was in accordance with such assessment. 13. Since the occasion to pay differential duty arises after finalization of the assessment, question of imposition of interest on such amount cannot arise. The amount which becomes payable after finalisation of assessment cannot be said to be one which was due and payable prior to such finalisation of assessment and as such, classifying the same as short-levy or short-payment cannot arise. There cannot be demand for payment of differential duty prior to finalisation of such assessment and for the same reason, there cannot be collection of such differential duty before levy in that regard is ascertained. Reliance is sought to be placed in that regard in the decision in the matter of Serai Kella Glass Works Pvt. Ltd. vs C.C.E., Patna reported 1997 (91) ELT 497, Commissioner of Central Excise, Mumbai vs. ITC Ltd. reported in 1006 (203) ELT 532. It is further contention....
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....ent of duty on finalisation of assessment, it does cover cases where the duty is paid at any subsequent date by the assessee on account of revision of price. The provisional assessment in the case in hand was resorted to because the appellants were not certain about the price at the time of removal of the goods. In other words, the provisional price was subjected to revision. Resort to Rule 7 protects the assessee from penal action which can be attracted for failure to pay the appropriate duty at the time of removal of the goods. Merely because the appellants took shelter of the provision of law comprised under Rule 7 that cannot exonerate the payment of interest on the delayed payment of duty. The situation in the case in hand is akin to the price revision at a future date and the same is fully covered by the decision of the Apex Court in S.K.F. India Ltd. case. Undisputedly, the differential duty was paid subsequent to the date of payment due at the time of removal of the goods. Finsalisation of the assessment does not alter the procedure of levy and collection of duty consequent to price variation. 17. In rejoinder, it was sought to be contended on behalf of the appellan....
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....the duty was payable i.e. at the time of clearance of the goods in terms of the said Act. Merely because the differential amount of duty is ascertained consequent to the finalization of assessment, the due date for payment of such amount never stands changed or extended. It would always relate to the date of removal of the goods thereof. It is only the quantification of the differential amount of duty is ascertained consequent to the finalization of assessment. And that too merely because the assessee was not able to ascertain the exact quantum of duty in the absence of sufficient material to finalize the valuation of the goods at the time of clearance of goods. That would not extend or change the due date for payment of duty. The due date for payment of duty is statutorily fixed being the date of removal of the goods consequent to the manufacture thereof, as the same cannot be changed by misinterpreting the provisions relating to the power of the Government to frame the Rules. 19. Besides, Rule 7(4) clearly provides that the assessee shall be liable to pay interest on any amount payable to the Central Government consequent to order for finalization of assessment under sub-....