TaxTMI 
TaxTMI 
TaxTMI 
2011 (6) TMI 567
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....der and the date of supply of transformers, the assessee protects their interest by incorporating a price variation clause. The assessee recovers the differential prices on goods which have already been cleared by issuing supplementary invoices and thereafter, pays differential excise duty on such differential price. 2.2 During the period from May 2004 to March 2009, the appellant paid differential duty of Rs.13,10,98,763/- on account of such price escalation after issue of supplementary invoices. The duty was paid by the appellant voluntarily and the department treated the duty payment as under section 11A(2B) of the Central Excise Act, 1944.However, they did not pay any interest on the delayed payment of duty as required under the said provision. Thereafter, the department issued a demand notice under Section 11 of the Central Excise Act, 1944 proposing to recover interest amounting to Rs.21,63,332/- under Section 11AB of the Act, for the period from May 2004 to March 2009. The said demand was issued vide notice dated 07/08/2009. Against the said demand, the appellant filed an appeal before the Commissioner (Appeals), who passed the impugned order and the....
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....re, 2010 (262) ELT 706 (Tri.Bang) had held that there are no specific provisions in Section 11AA and 11AB of the Central Excise Act, 1944 for issue of notice for recovery of interest and interest liability, automatically arises once the duty liability is determined. Therefore, principles of natural justice are not violated in ordering the recovery of interest while confirming the demand of duty. The Ld. DR also relies on the judgement of the Tribunal in the case of Commissioner of Service tax Vs. Pepsi Cola, 2007 (8) STR 246 (Tri-Ahmd), wherein also it was held that no demand notice or written notice is required to be issued for confirmation of interest, which is a liability accruing as a consequence of delayed payment of duty. Finally, the Ld. DR relies on the judgement of the Hon'ble apex Court in the case of CCE Vs. International Auto Ltd., 2010 (250) ELT 3 (SC), wherein it was held that whenever there is a short payment or short levy of duty on the date of removal and the differential duty is paid after clearance, interest also becomes leviable under the provisions of Section 11AB of the Central Excise Act. 5. We have carefully considered the rival submission....
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....ent of the unpaid duty on the basis of his own ascertainment or as ascertained by a Central Excise Officer and, in that event, such assessee in default would not be served with the Demand Notice under Section 11A(1) of the Act. However, Explanation (2) to the sub-section makes it clear that such payment would not be exempt from interest chargeable under Section 11AB of the Act. What is stated in Explanation (2) to sub-section 2(B) is reiterated in Section 11AB of the Act, which deals with interest on delayed payment of duty. From the Scheme of Section 11A(2B) and Section 11AB of the Act, it becomes clear that interest is levied for loss of revenue on any count. In the present case, one fact remains undisputed, namely, accrual of price differential. What does differential price signify? It signifies that value, which is the function of the price, on the date of removal/clearance of the goods was not correct. That, it was understated. Therefore, the price indicated by the supplementary invoice is directly relatable to the value of the goods on the date of clearance, hence, enhanced duty. This enhanced duty is on the corrected value of the goods on the date of removal. When the differ....
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....charged the duty liability belatedly and such delayed payment of duty will come under the provisions of sub-section (2B) of Section 11A of the Central Excise Act and consequentially section 11AB comes into play automatically and interest liability has to be discharged. Section 11AB does not specify any time limit for recovery of interest. In view of the clear exposition by the hon'ble apex court of the scope of sections 11A and 11AB of the Central Excise Act, 1944, the reliance placed by the appellant on various judgments cited by them is of no avail as the hon'ble apex court's decision prevail over all others. Thus the only issue for decision is whether in the absence of a specific provision prescribing the time limit in the said section, can interest be demanded and recovered without any time limit. 10. A similar issue came up for consideration before the hon'ble apex Court in the case of GOI Vs. Citedal Fine Pharmaceuticals,1989 (42) ELT 515 (SC). In that case the hon'ble apex Court held that in the absence of any period of limitation, it was settled that the authority was to exercise the power within a reasonable period. In that case, the hon'ble apex C....