2013 (8) TMI 225 - DELHI HIGH COURT

Period of limitation for Recovery of interest on account of retrospective revision of the prices – demand notice issued after 4 years - Held that:- Relying upon the decision in the case of Commissioner of Central Excise versus International Auto Limited,[2010 (1) TMI 151 - SUPREME COURT OF INDIA], it was held that interest is charged to compensate for loss caused because of late payment of duty. The said loss should be compensated - Interest chargeable under Section 11AB was payable on the duty paid under Section 11A(2B) under the supplementary invoice on the price differential on account of retrospective price escalation received by the assessee and if the same has not been paid, the same would be recovered from the assessee.

Period of limitation for demand of interest in case change in price with retrospective period – Held that:- Payment of interest is to be made under Section 11A and, therefore, the period of limitation prescribed therein would equally apply as has been held by the Delhi High Court in the case of Kwality Ice Cream Company [2012 (1) TMI 88 - Delhi High Court] and Gujarat High Court in Gujarat Narmada Fertilizers Company Limited [2012 (4) TMI 309 - GUJARAT HIGH COURT]. These judgments have relied upon the decision of the Supreme Court approving the view of the tribunal in TVS Whirlpool Limited [1999 (10) TMI 701 - SUPREME COURT OF INDIA] - The period of limitation prescribed for demand of duty under Section 11A is normally one year and, in exceptional circumstance of a case falling under the proviso to Section 11A(1), the period of limitation is five years. But that would be applicable only in case of misstatement, fraud, concealment etc., which is not the case here. As such, in the present case, the period of limitation for the demand for duty would be one year. By the same logic, the period of limitation for demand of interest thereon would be one year – Decided in favor of Assessee.