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2015 (7) TMI 184 - CESTAT CHENNAI

2015 (7) TMI 184 - CESTAT CHENNAI - TMI - Demand of interest - whether the appellant is required to pay interest on the differential duty paid on account of price variation raised through the supplementary invoices before taking into account the provisional assessment availed by the appellant - Held that:- appellant opted for provisional assessment on account of price variation clause in each of the contract. There is no dispute on the fact though they opted for provisional assessment immediatel .....

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nch decision, I hold that interest is chargeable on the differential duty paid through supplementary invoices raised by the appellants. - Decided against assesssee. - Appeal Nos. E/40397 to 40403/2014 - Final Order No. 40721-40727/2015 - Dated:- 30-6-2015 - Hon ble Shri R. Periasami, Technical Member,J. For the Appellant : Shri Raghavan Ramabadran, Advocate For the Respondent : Shri B. Balamurugan, AC (AR) ORDER As the issues involved in all the seven appeals are common and arising out of a sing .....

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of rate per Kg adopted on the estimated design value. On finalisation of the price, they have paid the differential duty on their own by raising the supplementary invoices on the goods already cleared before finalisation of assessment. Subsequently assessments were finalised by jurisdictional Asst. Commissioner by his orders dt.21.1.2011, 31.3.2011 & 26.8.2011 for different periods. In respect of 2 OIOs dt. 31.5.2011 and 26.8.2001, the LA demanded interest under Rule 7 (4) of CER where the .....

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venue appeals. 3. Heard both sides. 4. The Ld. Advocate appearing for the appellant submits that the present case relates to finalisation of provisional assessment under Rule 7 of CER and the differential duty was paid before finalisation of the provisional assessment by the jurisdictional AC. As per rule 7 (4) of CER, interest is demandable and the assessee is liable to pay interest on the differential duty if any consequent to the order of final assessment at the rates specified by notificatio .....

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d on the supplementary invoices issued after the due date of removal of goods and he held that interest is chargeable from the 1st day of the month succeeding the month for which duty is finalised. He further submits that interest is payable only from the date of finalisation decided by the adjudicating authority. He further submits that Commissioner (Appeals) in the impugned order wrongly relied on the Hon ble Supreme Court s decision in the case of CCE Pune Vs SKF India Ltd. 2009 (239) ELT 385 .....

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in the case of Cadbury India Ld. Vs CCE 2008 (232) ELT 224 (Tri.-LB). He submits that the Tribunal in the appellant s own case [BHEL Vs CCE Bhopal-2012 (275) ELT 614 (Tri.-Del.)] has dismissed their appeal by following the decision of Larger Bench and in the above case differential duty was paid only after finalisation of assessment and the said decision will not apply. He submits that since the Apex Court decision of SKF India Ltd. and the Larger Bench decision have been distinguished by the Ho .....

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l and reiterated the impugned order. He submits that interest is payable as the appellants have paid the differential duty by raising the supplementary invoices on account of price revision. He submits that Hon ble Supreme Court decision in the case of SKF India (Ltd. (supra) is clearly applicable to the present case. He further submits that the Tribunal Division Bench in their own case (supra) on identical issue of demand of interest had dismissed their appeal and held that interest will arise .....

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ELT 385 (SC) (2) Cadbury India Ltd. Vs CCE Pune 2008 (232) ELT 224 (Tri.-LB) (3) BHEL Vs CCE Bhopal 2012 (275) ELT 614 (Tri.-Del.) (4) Excel Rubber Ltd. Vs CCE Hyderabad 2011 (268) ELT 419 (Tri.-LB) 6. I have carefully considered the submissions of both sides and examined the records. The main issue in all these appeals relates to demand of interest and whether the appellant is required to pay interest on the differential duty paid on account of price variation raised through the supplementary i .....

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alising the price they raised supplementary invoice for recovering the amount from buyers and paid the differential duty. Appellants mainly relied on Bombay High Court decision in CEAT Ltd. (supra), and also contended that Hon ble Supreme Court s decision in the case of SKF India Ltd. is not applicable in their case. In this regard, I find that the Principal Bench of this Tribunal in the appellant s own case reported in BHEL Vs CCE Bhopal (supra), has discussed the identical issue in depth and h .....

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le only in cases where there is short-payment of duty which is recoverable under Section 11A and it would not apply to the differential duty recoverable under Rule 7(3) of the said Rules and the occasion to demand the duty would not arise unless the assessment is finalized. .... .... .... 16.?Placing reliance in the decision in the matter of S.K.F. India Ltd. it is submitted that though the decision does not deal with the issue of charging interest on payment of duty on finalisation of assessmen .....

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ly because the appellants took shelter of the provision of law comprised under Rule 7 that cannot exonerate the payment of interest on the delayed payment of duty. The situation in the case in hand is akin to the price revision at a future date and the same is fully covered by the decision of the Apex Court in S.K.F. India Ltd. case. Undisputedly, the differential duty was paid subsequent to the date of payment due at the time of removal of the goods. Finalization of the assessment does not alte .....

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t already paid prior to the finalisation of the assessment. In other words, while interpreting the Rule 7(4), the expression month for which such amount is determined is necessarily to be understood to mean any month subsequent to the passing of the assessment of finalisation order and not prior thereto. 18. There can hardly be any dispute that Central Excise Rules, 2002 have been framed in exercise of the powers conferred under Section 37 of the Central Excise Act, 1944. Sub-section thereof cle .....

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y class of provisional assessment. In other words, apart from generality of power enshrined under sub-section (1) of Section 37 of the said Act, sub-section (2)(ibb) of Section 37 specifically provides that the Rules may provide for charging interest on differential amount of duty becoming payable consequent to the finalization of provisional assessment. The provision of law comprised thereunder nowhere specifies such Rules shall restrict the levy of interest for the period consequent to finaliz .....

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37(2)(ibb) would relate to the date on which the duty was payable i.e. at the time of clearance of the goods in terms of the said Act. Merely because the differential amount of duty is ascertained consequent to the finalization of assessment, the due date for payment of such amount never stands changed or extended. It would always relate to the date of removal of the goods thereof. It is only the quantification of the differential amount of duty is ascertained consequent to the finalization of .....

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of the Government to frame the Rules. 19. Besides, Rule 7(4) clearly provides that the assessee shall be liable to pay interest on any amount payable to the Central Government consequent to order for finalization of assessment under sub-rule (3) at the rate specified by the Central Government by a Notification issued under Section 11AA or Section 11AB of the said Act from the first day of the month succeeding the month for which such amount is determined till the date of payment thereof. The pr .....

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is to be accepted then the expression used in Rule 7(4) would have been in instead of for , with reference to the month following the day on which duty was due. .... .... .... 22.?Taking into consideration the law laid down by the Apex Court in SKF India Ltd. case, the provision of law referred herein above, we find no case for interference in the impugned order and hence the appeal fails and is hereby dismissed. 7. As seen from the above order, the principal Bench of this Tribunal has clearly .....

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