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2014 (10) TMI 482
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....nd the controversy involved in these batch of cases, we refer to the facts of the case in C.M.A.No.1355 of 2014. 4.2. The assessee is a manufacturer of electrical equipment falling under Chapter Heading 85 of the Schedule to Central Excise Tariff Act, 1985. The assessee was manufacturing and supplying goods to various customers. According to the assessee, the clearance to the customer was based on transaction value and is supported by purchase order from the customer. Whenever there was escalation in direct input or direct cost, such impact was taken up with the customers. Thereafter, the customer issues an order of amendment giving effect to the price increase retrospectively. The assessee would thereafter raise supplementary invoice and would pay differential duty on such price revision. This resulted in time gap between the date of actual clearance and the date of supplementary invoice on which duty was paid. According to the assessee, the differential duty was paid soon after the order of amendment was received from the customer and, therefore, there is no delay in payment of differential duty. 4.3. The Department, after receipt of the differential duty based on supplemen....
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....oods. It is contended that appeal relates to demand of interest and penalty. Ld. Advocate further submits that the present appellant was formerly known as Areva T&D India Ltd. It is submitted that the Tribunal for the earlier period dismissed the appeal on the same issue which was challenged before the Hon'ble Madras High Court. It is submitted that by order dt. 10.4.2012, the Hon'ble Madras High Court in MP.No.1 to 1 of 2012 in CMA No.475 to 478 of 2012 granted absolute stay. 4. We find that the Hon'ble Supreme Court in the case of CCE v. SKF India Ltd., 2009 (239) ELT 385 (SC) held that interest is payable for subsequent revision of price after clearance of the goods. The Hon'ble Supreme Court set aside the penalty. It is noted that the said decision was followed by the Supreme Court in CCE v. International Auto Ltd., 2010 (250) ELT 3 (SC). In view of the settled legal position, we set aside penalty and uphold demand of interest. The appeal is partly allowed. The stay application is disposed of. 4.8. Aggrieved by the order passed by the Tribunal, the assessee has filed the appeal raising the following substantial questions of law: (1) Whether in the facts....
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....e voluntarily or after determination of duty under Section 11A of the Act and inasmuch the provision of Section 11AA of the Act did not read in the same manner as that of Section 11AB of the Act, as it stood during the relevant assessment years, in a case where the assessee had voluntarily made payment, the question of interest on delayed payment of duty does not arise. To buttress the said plea, reliance was placed on the decision of the Karnataka High Court in Bharat Heavy Electricals Ltd. case, referred supra. 7. Mr.Ravi Ananthapadmanabhan, learned Standing Counsel appearing for the second respondent in all these appeals reiterated the stand taken by the department before the authorities below and prayed for dismissal of these appeals in the light of the law laid down by the Supreme Court in SKF India Ltd. case, referred supra. 8. We have heard the learned counsel on either side and perused the orders by the Tribunal and the authorities below. 9. Before adverting to the merits of the case, it would be relevant to refer to Sections 11A(1), 11A(2B) and 11AB of the Act, which read as under: Section 11A. Recovery of duties not levied or not paid or short-levied or short-....
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....be counted from the date of receipt of such information of payment. Explanation 1.Nothing contained in this sub-section shall apply in a case where the duty was not levied or was not paid or was short-levied or was short-paid or was erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty. Explanation 2.For the removal of doubts, it is hereby declared that the interest under section 11AB shall be payable on the amount paid by the person under this sub-section and also on the amount of short-payment of duty, if any, as may be determined by the Central Excise Officer, but for this sub-section. Section 11AB. Interest on delayed payment of duty. (1) Where any duty of excise has not been levied or paid or has been short-levied or short paid or erroneously refunded the person who is liable to pay the duty as determined under the sub-section (2), or has paid the duty under sub-section (2B), of section 11A shall, in addition to the duty, be liable to pay interest at such rate not below ten per cent and not exce....
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....hort payment etc. of duty is by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Act or of Rules made thereunder with intent to evade payment of duty. 10.2. In SKF India Ltd. case, referred supra, the Supreme Court has clearly held that Section 11A of the Act provides that assessee can make amends subject to certain terms and conditions. It makes it clear that Section 11A(1A) dealt with cases where the non-payment or short payment etc. of duty is by reason of fraud collusion etc. and Section 11A(2B) of the Act dealt with cases where the non-payment or short payment of duty is not intentional. 10.3. The Supreme Court in SKF India Ltd. case, referred supra, further held that payment of differential duty by the assessee at the time of issuance of supplementary invoice to the customer demanding the balance of the revised prices clearly falls under the provisions of Section 11A(2B) of the Act. At this juncture, it is relevant to refer to paragraphs (9) to (11) of the decision of the Supreme Court in SKF India Ltd. case, referred supra, wherein it is held as under: 9. Section 11A puts the cases of no....
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....ression of facts, or contravention of any of the provisions of the Act or of Rules made thereunder with intent to evade payment of duty, under the scheme of the four sections (11A, 11AA, 11AB & 11AC) interest is leviable on delayed or deferred payment of duty for whatever reasons. 11. The payment of differential duty by the assessee at the time of issuance of supplementary invoices to the customers demanding the balance of the revised prices clearly falls under the provision of sub-section (2B) of section 11A of the Act. (emphasis supplied) 10.4. We notice that by interpreting Explanation (2) to sub-section 2B of Section 11A of the Act, the Supreme Court in SKF India Ltd. case, referred supra, has clearly held that such payment of differential duty at the time of issuance of supplementary invoices would not be exempt from interest chargeable under Section 11AB of the Act. 10.5. The Supreme Court reiterated the said position of law in Commissioner of Central Excise v. International Auto Ltd., 2010 (250) ELT 3 (SC) and held as follows: 8. Section 11A of the Act deals with recovery of duty not levied or not paid or short-levied or short-paid. The said section, which sto....
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..... In that case, assessee had made a claim for refund of excise duty on the differential between the price on the date of removal and the reduced price at which tyres were sold. The price was approved by the Government. In that case, the assessee submitted that its price list was approved by the Government on 14th May, 1983, but subsequent thereto, on account of consumer resistance, the Government of India directed the assessee to roll back the prices to pre-14th May, 1983 level and on that account, price differential arose on the basis of which the assessee claimed refund of excise duty which stood rejected by this Court on the ground that once the assessee had cleared the goods on classification, the assessee became liable to payment of duty on the date of removal and subsequent reduction in the prices for whatever reason cannot be made a matter of concern to the Department insofar as the liability to pay excise duty was concerned. In the present case, we are concerned with the imposition of interest which, as stated above, is charged to compensate the Department for loss of revenue. Be that as it may, as stated above, the Scheme of Section 11A of the Act has since undergone subst....
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.... plea raised by the learned counsel for the appellants fails and in that regard, we find no infirmity in the order passed by the Tribunal. 11.1. The second plank of the argument raised by the learned counsel for the appellants is that consequent to introduction of Section 11AA by the Act with effect from 8.4.2011, interest on delayed payment of duty is payable where such payment is made voluntarily or after determination of duty under Section 11A of the Act and inasmuch the provision of Section 11AA of the Act did not read in the same manner as that of Section 11AB of the Act, as it stood during the relevant assessment years, in a case where the assessee had voluntarily made payment, the question of interest on delayed payment of duty does not arise. 11.2. Section 11AA of the Act, as amended by Section 64 of the Finance Act, 2011 (8 of 2011), does not in any way advance the case of the appellant, as we find that the liability to pay interest on delayed payment of duty is clearly envisaged in Section 11A(2B) read with Explanation 2 to the said provision. Such interest was leviable even during the period in question. In fact, the Supreme Court in SKF India Ltd. case, referred s....