TMI Blog2011 (6) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 21-6-2011 - Mr. Ashok Jindal, Mr. P.R. Chandrasekharan, JJ. Appearance: Shri.Prakash Shah, Advocate for appellant Shri.S.S. Katiyar, SDR, for respondent Per: P.R. Chandrasekharan 1. The appeal and the stay application are directed against the order-in-appeal No. YDB/77/M-III/2010 dated 15/02/2010. Vide the said order, the Ld. Commissioner (Appeals) upheld the demand notice issued by the lower adjudicating authority and rejected the appeal filed by the appellants. 2. Briefly stated the facts of the case are as follows:- 2.1 The appellant M/s. Emco Ltd., Thane, are manufactures of transformers and supply the goods to various buyers like State Electricity Boards following a tender system. At the time of filing of tender documents, the assessee declares a base price based on the cost of raw materials prevalent at that time. Since there is a wide gap between the date of filing the tender and the date of supply of transformers, the assessee protects their interest by incorporating a price variation clause. The assessee recovers the differential prices on goods which have already been cleared by issuing supplementary invoices and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., 2000 (119) ELT A1777 (SC) iv) CCE, Lucknow Vs. Annavarma Concrete (P) Ltd., 2011 (263) ELT 469 (Tri-Del) v) CCE Vs. Krishna Engg. Works Ltd., 2010 (261) ELT 801 (Tri-Del) vi) CCE, Bangalore Vs. Bharat Heavy Electrical Ltd., 2010 (257) ELT 369 ) Kar) vii) CCE, Pune Vs. SKF India Ltd., 2009 (239) ELT 385 (SC) viii) Order dt. 25/11/2009 pass by the Hon-ble Bombay High Court in Emco Ltd., Vs. UOI in WP No.9900 of 2009. 4. The Ld. DR on the other hand would submit that the interest liability occurs automatically and a separate written notice is not required for its recovery, if it is not included in the assessment order as has been held by the Hon'ble apex Court in the case of Commissioner of Trade Tax Vs. Kanhai Ram Thekedar, 2005 (185) ELT 3 (SC). The Ld. DR also submits that this Tribunal in the case Dodsal Engineering Construction Pvt Ltd., Vs. CCE, Bangalore, 2010 (262) ELT 706 (Tri.Bang) had held that there are no specific provisions in Section 11AA and 11AB of the Central Excise Act, 1944 for issue of notice for recovery of interest and interest liability, automatically arises once the duty liability is determined. Therefore, princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest under Section 11AB of the Act. Further, in the case of CCE Vs. International Auto Ltd. [2010(250) ELT 3 (SC)], the apex Court further clarified the position as follows in para 8 of the judgment: "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 stood inserted by Act 25 of 1978, underwent a sea-change when Parliament inserted major changes in that section vide Act 14 of 2001 [with effect from 11th May, 2001] and Act 32 of 2003 [with effect from 14th May, 2003]. It needs to be mentioned that simultaneously Act 14 of 2001 also made changes to Section 11AB of the Act. In the case of S.K.F. India Limited [supra], it has been, inter alia, held, as can be seen from the above-quoted paragraphs, that sub-section 2(B) of Section 11A provides that the assessee in default may make payment of the unpaid duty on the basis of his own ascertainment or as ascertained by a Central Excise Officer and, in that event, such assessee in default would not be served with the Demand Notice under Section 11A(1) of the Act. However, Explanation (2) to the sub-section makes it clear that such payment would not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 substantial change and, in the circumstances, in our view, the judgment of this Court in the case of M.R.F. Limited [supra] has no application to the facts of this case. In our view, the judgment of this Court in the case of SKF India Limited [supra] is squarely applicable to the facts of this case. 9. From the judgement of the apex Court cited above,it is absolutely clear that interest liability is a consequential liability whenever there is a delayed payment of duty and no separate notice is required for recovery of interest once the assessee has discharged the duty liability belatedly and such delayed payment of duty will come under the provisions of sub-section (2B) of Section 11A of the Central Excise Act and consequentially section 11AB comes into play automatically and interest liability has to be discharged. Section 11AB does not specify any time limit fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very of differential prices subsequent to the clearance of the goods and they were also discharging differential duty liability on issue of supplementary invoices. Therefore, it was incumbent on the department to recover interest which the assessee had failed to pay within a reasonable period. In a similar case, the hon'ble apex court in the case of Commissioner vs.TVS Whirlpool Ltd. [2000(119) ELT A177 (SC)] held as follows:- "It is only reasonable that the period of limitation that applies to a claim for the principal amount should also apply to the claim for interest thereon." Respectfully following the said decision, we hold that when the normal time limit prescribed is one year from the relevant date, (the date of filing of return) for recovery of the principal amount,(excise duty, in this case), it will be reasonable to adopt the same period for recovery of interest as well. 12. Therefore, in the instant case, we are of the view that the department should have initiated the proceedings for recovery of interest within a period of one year from the date of filing of monthly returns. Since the demand notice is issued only on 07/08/2009, the demand for recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X
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