TMI Blog2015 (6) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... SUPREME COURT ], observed that there is some ambiguity in the said provisions, which was a cause for amendment brought to Section 11AA of the Act. - Decision in assessee's own previous case followed [2014 (10) TMI 482 - MADRAS HIGH COURT] - Decided against assessee. - C.M.A. Nos. 2659-2663 of 2014 and M.P. No. 1 of 2014 (5 Petitions) - - - Dated:- 11-9-2014 - R. Sudhakar and G.M. Akbar Ali, JJ. Shri Joseph Prabakaran, for the Appellant. Shri Ravi Ananthapadmanabhan, Standing Counsel, for the Respondent. JUDGMENT These appeals are filed challenging the Final Order Nos. 40086-40090 of 2014, dated 6-1-2014 passed by the Customs, Excise and Service Tax Appellate Tribunal (for brevity, the Tribunal ). 2.1 The brief facts of the case are as under : The assessee is a manufacturer of electrical equipment falling under Chapter Heading 85 of the Schedule to Central Excise Tariff Act, 1985. The assessee was manufacturing and supplying goods to various customers. According to the assessee, the clearance to the customer was based on transaction value and is supported by purchase order from the customer. Whenever there was escalation in direct input or direct cost, suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pheld the demand of interest and set aside the penalty imposed. 2.6 Aggrieved by the order passed by the Tribunal, the assessee has filed these appeals raising the following substantial questions of law : (1) Whether in the facts and circumstances of the case, the appellant is liable to pay interest under Section 11AB of the Act, on raising of supplementary invoice? (2) Whether in the facts and circumstances of the case, the first respondent is correct in ignoring the decision of the Karnataka High Court in BHEL, especially when the departmental appeal against the said decision has been dismissed by the Supreme Court? 3.1 The main plank of the argument of Mr. Joseph Prabakar, learned counsel for the appellant, is that payment of interest under Section 11AB of the Act would apply only when there is a demand by the department on account of short payment and inasmuch as the assessee has paid duty when the liability occurred, no interest would become payable for receipt of additional consideration later. 3.2 He further contended that consequent to introduction of Section 11AA of the Act by Section 64 of the Finance Act, 2011 with effect from 8-4-2011, interest o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty, by such person or his agent, the provisions of this sub-section shall have effect, as if for the words one year , the words five years were substituted : Explanation. - Where the service of the notice is stayed by an order of a Court, the period of such stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be. (2B) Where any duty or excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person, chargeable with the duty, may pay the amount of duty on the basis of his own ascertainment of such duty or on the basis of duty ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of the duty, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid : Provided that the Central Excise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Finance Bill, 2001 receives the assent of the President. Explanation 1 : Where the duty determined to be payable is reduced by the Commissioner (Appeals), the Appellate Tribunal, National Tax Tribunal or, as the case may be, the court, the interest shall be the payable on such reduced amount of duty. Explanation 2 : Where the duty determined to be payable is increased or further increased by the Commissioner (Appeals), the Appellate Tribunal, National Tax Tribunal or, as the case may be, the court, the interest shall be payable on such increased or further increased amount of duty. (emphasis supplied) 7.1 Apropos of the first plank of argument made by the learned counsel for the appellant that unless there is a demand, there is no question of payment of interest, we find that such an argument would have no legs to stand, as the Supreme Court in SKF India Ltd. case, referred supra, has clearly set out that Section 11A of the Act puts the cases of non-levy or short levy, non-payment or short payment or erroneous refund of duty in two categories, that is to say (i) when the non-payment or short payment etc. of duty is for a reason other than deceit; the default is due t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2B). 10. Sub-section (2B) of Section 11A provides that the assessee in default may, before the notice issued under sub-section (1) is served on him, make payment of the unpaid duty on the basis of his own ascertainment or as ascertained by a Central Excise Officer and inform the Central Excise Officer in writing about the payment made by him and in that event he would not be given the demand notice under sub-section (1). But Explanation 2 to the sub-section makes it expressly clear that such payment would not be exempt from interest chargeable under Section 11AB. that is, for the period from the first date of the month succeeding the month in which the duty ought to have been paid till the date of payment of the duty. What is stated in Explanation 2 to sub-section (2B) is reiterated in Section 11AB that states 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 has paid the duty under sub-section (2B) of Section 11A, shall, in addition to the duty, be liable to pay interest .. It is thus to be seen that unlike penalty that is attracted to the category of cases in which the non-payment or short paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11A(2B) and Section 11AB of the Act, it becomes clear that interest is levied for loss of Revenue on any count. In the present case, one fact remains undisputed, namely, accrual of price differential. What does differential price signify? It signifies that value, which is the function of the price, on the date of removal/clearance of the goods was not correct. That, it was understated. Therefore, the price indicated by the supplementary invoice is directly relatable to the value of the goods on the date of clearance, hence, 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, 1997 (92) E.L.T. 309 (S.C.) would not apply. That judgment was on interpretation of Section 11B of the Act, which concerns claim for refund of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that the Special Leave to Appeal filed by the Revenue against the decision of the Division Bench of the Karnataka High Court in Bharat Heavy Electricals Ltd. case, referred supra, was dismissed by the Supreme Court by order dated 3-12-2010 made in Special Leave to Appeal (Civil) CC.17917 of 2010. 7.8 We find that another Division Bench of the Karnataka High Court in Commissioner of Central Excise v. Presscom Products, 2011 (268) E.L.T. 344 (Kar.) has held that the decision in Bharat Heavy Electricals Ltd. case, referred supra, is per incuriam. The relevant portion of the said decision reads as under : 13. The said judgment rendered by this Court is contrary to the law declared by the Apex Court in the aforesaid two judgments. Further, the said judgment does not take into consideration the explanation to sub-section (2B) of Section 11A and accordingly, it is a judgment per incuriam . Therefore, the law laid down by this Court in the aforesaid judgment is not a good law. 7.9 We find, on facts, that in the present case the assessee has cleared goods and paid duty thereon and raised supplementary invoices, but however failed to pay interest payable under Section 11AB o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o present the scheme of that section in a more coherent and readable form. Therefore, the plea of the appellant that their voluntary payment of duty would not attract interest is unacceptable. 8.3 In any event, the decision of the Supreme Court in SKF India Ltd. case, referred supra, clearly answers the point in issue against the assessee. Accordingly, the second plank of argument of the learned counsel for the appellant also does not merit consideration. 9. We have earlier in the case of S.L. Lumax Ltd. v. The Commissioner of Central Excise (Judgment dated 28-8-2014 made in C.M.A. No. 1436 of 2014) followed the decision of the Supreme Court in SKF India Ltd. case, referred supra, and dismissed a similar plea raised by the assessee. 10. That apart, in assessee s own case in relation to a different period, we have dismissed the appeals filed by the assessee on the very same plea vide judgment dated 10-9-2014 made in C.M.A. No. 1355 of 2014 and batch cases. 11. For the foregoing reasons, we answer the substantial questions of law raised in these appeals against the assessee and dismiss these appeals. No costs. Consequently, connected miscellaneous petitions are closed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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