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2016 (3) TMI 476 - AT - Central ExciseDifferential duty paid on account of revision of cost in respect of captively consumed goods and transferred to their sister unit - whether subject to interest or not and penalty should be imposed or not? - Held that:- We find that the demand of interest under Section 11AB is correctly confirmed by the adjudicating authority and upheld by the first appellate authority as interest liability arises on the differential Central Excise duty paid due to revision of the cost of the goods. This law is settled and does not require any revisit. Penalty is imposed under Rule 25 of the Central Excise Rules, 2002. In our considered view this provision cannot be brought into play as in the case in hand the appellant had been filing the price list with the authorities for the clearance of the intermediate product to their own sister concern and discharging Central Excise duty on the cost of production as per the provisions during the material period. The differential duty has arisen due to revision in the cost not done at the time of clearance of the goods to their sister concern. We find strong force in the contentions raised by the learned Counsel that the issue is of revenue neutrality as duty paid on clearance of the goods to their sister concern is cenvatable. We find strong force in the contentions raised by the learned Counsel that the issue is revenue neutral as any amount paid as central excise on parts and components, cleared to their sister concern, the recipient unit would take the CENVAT credit of the Central Excise duty paid as final products manufactured are dutiable. The provisions of Rule 25 of the Central Excise Rules does not get attracted as the said Rule provide for imposition of penalty only if there is a violation of the provisions of Rules. In the case in hand, we have already recorded that as the appellant was clearing the goods on payment of duty and subsequently on their own revised the price and discharged the differential duty there seems to be no violation of any provisions. Penalty imposed on the appellant is unwarranted. - Decided in favour of assessee in part
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