AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 783
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....they get their accounts audited and they are submitting certificate from CA/Cost Accountant giving the details of the sales value, various discounts given etc. Along with these details, they also calculate the value (and hence differential duty amount) on which they are required to pay the excise duty. They submit these details to the Divisional Dy./Assistant Commissioner for finalization of the provisional assessment for the previous year. While furnishing these details to the Deputy/Assistant Commissioner they also pay the differential duty without waiting for formal order of Deputy/Assistant Commissioner. Order of finalization of the assessment is issued by the Deputy/Assistant Commissioner after few weeks/months (which is after payment of differential duty). 3. The issue in dispute is whether they are liable to pay interest on the differential duty that would commence from the month succeeding the date on which the duty was due and payable in relation to the goods cleared till the date of payment of differentia, duty. 4. Heard both sides. 5. Learned Counsel for the appellant draws our attention to the Tribunal's decision in the case of Ispat Industries Ltd. v.....
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.... (S.C.). Hon'ble Supreme Court has further followed the said decision in the case of Commissioner of Central Excise v. International Auto Ltd. reported in 2010 (250) E.L.T. 3 (S.C.). Learned A.R. further stated that the Tribunal's judgment in the case of Ispat Industries Ltd. was by a Single Member who examined the issue with reference to Rule 7(4) alone and ignored other Rules and matter was not examined in detail. Moreover, judgments of Hon'ble Supreme Court and Hon'ble Karnataka High Court were not taken into consideration as these were not available/not mentioned. Learned A.R. stated that the same position continued before the Hon'ble Bombay High Court. Learned A.R. further stated that these judgments of Hon'ble Supreme Court/Karnataka High Court/Larger Bench of Tribunal and other judgments have analyzed the legal position in detail. In view of this position, the said judgments have to be considered as per incuriam and cannot be applied in general. Learned A.R. stated that in view of the analysis done in the Larger Bench decision, of the Tribunal (supra) Hon'ble Karnataka High Court decision (supra) as also in the case of Bharat Heavy Electricals Ltd. (supra) appeals are requir....
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....etermined to the date of payment of duty. This view also get supported by provisions of Section 11AB. "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 duty as determined under 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 exceeding thirty-six per cent, per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, from the first date of the month succeeding the month in which the duty ought to have been paid under this Act, or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2), or sub-section (2B), of Section 11A till the date of payment of such duty" : 8. Ld. A.R. has quoted the Larger Bench decision of this Tribunal in the case of Cadbury India Ltd. v. Commissioner of Cus. & C. Ex., Pune reported in 2008 (232) E.L.T. 224 (Tri.-LB) = 2010 (18) S.T.R. 363 (Tri.-LB). The relevant p....
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....ay interest arises consequent to finalization of assessment and not before that. Thus, the provisions of Customs Act in no way, support the plea of the learned Counsel of the appellants. The only difference in the Customs Act and the Central Excise Act is that, while under Customs Act, the liability to pay interest arises from the month, in which assessment was made provisional, whereas under the Central Excise Act, the liability to pay interest arises from the first day of the month succeeding the month for which the assessment was finalized. This is in the view of the fact that under the Central Excise Act, the duty liability can be discharged by the 5th of the month following the month in which the goods were cleared, whereas under the Customs Act it has to be discharged before the clearance of the goods. 29. We further note that in the scheme of the Central Excise, the Returns are filed on monthly/quarterly basis and the assessments are made on monthly or quarterly basis. Therefore, the provisional assessment has to be finalized for every month separately and it is for this reason that Rule 7(4) refers to the month for which the assessment is finalized. As assessment is t....
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....ously relate to the date on which the duty was required to be paid. Considering the provisions of Section 4 of the said Act, the duty becomes payable on each removal of the goods consequent to the manufacture thereof. Being so, the expression "becomes payable" under Section 37(2)(ibb) would relate to the date on which 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....
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....bserved that the Assessee paid the duty on its own accord immediately when the revised rates became known to them from their customers. The differential duty was due at that time i.e. when the revised rates applicable with retrospective effect were learnt by the Assessee, which was much after the clearance of the goods and therefore, question of payment of interest does not arise as the duty was paid as soon as it was learnt that it was payable. Finding that provisions of Section 11A(2) and 11A(2B) were not applicable as the situation occurred in the instant case was quite different, Section 11AB(1) was not at all applicable, and therefore, the Assessee was not required to pay interest." 13. It further held that a case of this nature would not fall in the category where duty of excise was not paid or short-paid. 14. We are unable to subscribe to the view taken by the High Court. It is to be noted that : the assessee was able to demand from its customers the balance of the higher prices by virtue of retrospective revision of the prices. It, therefore, follows that at the time of sale the goods carried a higher value and those were cleared on short payment of duty. The di....
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....ence, enhanced duty. This enhanced duty is on the corrected value of the goods on the date of removal. When the differential duty is paid after the date of clearance, it indicates short-payment/ short-levy on the date of removal, hence, interest which is for loss of revenue, becomes leviable under Section 11AB of the Act. In our view, with the entire change in the Scheme of recovery of duty under the Act, particularly after insertion of Act 14 of 2001 and Act 32 of 2003, the judgment of this Court in the case of M.R.F. Limited (supra) would not apply. That judgment was on interpretation of Section 11B of the Act, which concerns claim for refund of duty by the assessee. That judgment was in the context of the price list approved on 14th May, 1983. 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 ....
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....s for assessment of duty, where the assessee shall himself assess the duty payable on any excisable goods and pay the same. However, where the assessee is unable to determine the value of the excisable goods or determine the rate of duty applicable thereto, Rule 7 provides for provisional assessment. Under the said provision, the assessee may request the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in writing, giving reasons for payment of duty on provisional basis and the authority may order allowing payment of duty on provisional basis at such rate or on such value as may be specified by him. The payment of duty on provisional basis is allowed subject to assessee executing a bond binding himself to pay the difference between the amount of duty as may be finally assessed and the amount of duty provisionally assessed. Thereafter, within a period not exceeding six months from the date of communication of the order of provisional assessment, the aforesaid authorities shall pass an order for final assessment. Then, under sub-rule (4), the assessee shall be liable to pay interest on any amount payable to Central Government, ....
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....e date it was actually liable to be paid. Therefore, if the duty paid, under a provisional assessment is less than what is determined in the final assessment, it is a case of short payment of duty. Therefore interest is payable on that short payment of duty from the due date, the relevant date being the day on which the duty is to be adjusted. Therefore, the date of provisional assessment and the date of final assessment have no relevance in deciding the payment of interest. The date on which duty is payable is provided under the Rules. If the duty determined to be paid under the final assessment is not paid on the due date, if it is short paid, not only the assessee has to pay the balance in duty, he is also liable to pay interest on such short payment of duty from the due date. The only advantage is, he will get the benefit of one month from the said due date as is clear from Rule 7(4). Therefore, the order passed by the Tribunal holding that interest is payable from one month from the date of final assessment order is erroneous and is liable to be set aside. 16. It is submitted that this is a case where the assessee has paid excess duty and if that duty is adjusted, there ....