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TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 116
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.... Board (KSEB) as per the contract which includes a price variation clause. The appellant paid duties at the time of removal of the goods. Subsequently, prices were enhanced retrospectively in view of the increased in the cost of raw material. The differential duty in respect of such goods which were already cleared was paid by issuing supplementary invoices using Cenvat credit. 3. A show cause notice dated 18.01.2008 was issued to the appellant alleging that the supplementary invoices were raised and, therefore, they are relatable to the clearances already made during the previous months. As per the proviso to Rule 3 (4) of Cenvat Credit Rules, 2004 and proviso to Rule 3 (3) of Cenvat Credit Rules, 2002, the appellant could not have used C....
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..... The first contention of the appellant is that the supplementary invoices were relatable to the month in which the supplementary invoices were raised and not relatable to the month in which the goods were originally cleared because the duty became payable only when the price was enhanced and not before. The appellant relies on the order of the Tribunal in Essar Steel Ltd. versus Commissioner of Central Excise, Customs & Service Tax, Visakhapatnam - I [2010 (251) E.L.T. 255 (Tri. - Bang.)] in which it was held:- "5.4 From the mere reading of the above said provisions as regards supplementary invoices, we find that the supplementary invoice is raised by the manufacturer or importer in case of liability of additional amount of excise duty. ....
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.... make the payment. This becomes clear when one reads the word 'payable' and the latter part of the provision which talks of buyer being liable to pay. In other words, at the point of time when the transaction was entered into the buyer must be aware that a particular price is payable qua the transaction in question, or that he is liable to pay at a future point of time but that liability must have arisen at the point of time of the transaction. This is more than abundantly clear because Section 4(1) of the Act fastens charge on transaction value, i.e. value placed on the goods at the time of transaction. 5. If at the given point of time when the transaction took place the additional price was not fixed, the liability of the buyer to pay t....
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.... The relevant paragraph of the decision in Advance Surfactants India Ltd. reads as follows:- "7. In view of the above and for the reasons stated hereinabove, proviso to sub-rule (4) of Rule 3 of Cenvat Credit Rules is held to be ultra vires and unconstitutional to the Scheme of Cenvat Credit. Now the appropriate authority to adjudicate the show cause notice accordingly and consider and/or treat the proviso to sub-rule (4) of Rule 3 of Cenvat credit Rules as unconstitutional, in accordance with law and on its own merits. Rule is made absolute to the aforesaid extent. No order as to costs". 9. The third argument of the appellant is regarding the interest under Section 11AB. It is the assertion that since the duty is relatable to the date o....
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....ate on which the supplementary invoice was raised has been decided by the Supreme Court in Steel Authority of India. Accordingly, interest under Section 11AB needs to be paid by the appellant on the differential amount of duty. 14. On the second question of whether Cenvat credit can be utilized for payment of duty in view of the proviso to Rule 3 (4) of the Cenvat Credit Rules, 2004, we find that the High Court of Gujarat in Advance Surfactants India Ltd. has held that this proviso is ultravires. No judgment of any other High Court or Supreme Court has been produced before us to show that a contrary view has been taken in respect of this proviso. Therefore, we find that the appellant was correct in utilizing the Cenvat credit for payment o....