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Commissioner of Central Excise Commissionerate, Jaipur Versus Man Structurals Pvt. Ltd., Jaipur

2016 (6) TMI 918 - RAJASTHAN HIGH COURT

Demand of interest on additional duty payable after submission of supplementary invoices - Held that:- while accepting the appeal of the revenue in reference to the judgments in the cases of SKF India Ltd. [2009 (7) TMI 6 - SUPREME COURT] and International Auto Ltd. [2010 (1) TMI 151 - SUPREME COURT OF INDIA], the impugned order is set aside. The issue is ordered to be governed by the judgment in the case of International Auto Ltd. [2010 (1) TMI 151 - SUPREME COURT OF INDIA]. We make it clear th .....

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against the assessee till the issue referred to the Larger Bench is decided in the case of M/s. Steel Authority of India Ltd. [2015 (12) TMI 594 - SUPREME COURT]. - Decided in favor of revenue. - D.B. CENTRAL EXCISE APPEAL NO.10/2016 - Dated:- 18-5-2016 - MR. M.N.BHANDARI AND MR. J.K.RANKA, JJ. For The Revenue : MrAjay Shukla For The Assessee : Mr.Pancham Surana, Mr.Achintya Kaushik By the Court : By this excise appeal, a challenge is made to the order dated 14th July, 2015 passed by Customs, Ex .....

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International Auto Ltd. reported in 2010 (250) ELT 3 (SC). Therein, the issue has been decided in favour of the revenue and interest was made admissible for the entire period. Accordingly, a prayer is made to set aside the order of the Tribunal as it has relied on the judgment of the Punjab & Haryana High Court in the case of Neel Metal Products Ltd. Vs. Commissioner of Central Excise, Delhi - III reported in 2014 (306) ELT 367 (P&H). The dispute about addition of interest was decided in .....

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teel Authority of India Ltd. Vs. Commissioner of Central Excise, Raipur in Civil Appeal No.2150/2012 decided on 07th December, 2015 along with connected appeals. Doubting the correctness of the judgment in two cases, the matter has been referred to Larger Bench. In view of the aforesaid, the issue is yet to be determined by the Apex Court. Accordingly, a prayer is made not to cover this appeal by the judgments in the cases of SKF India Ltd. and International Auto Ltd. (supra). If, at all, this C .....

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Auto Ltd. (supra), it is made clear that present appeal would finally be covered by the judgment of the Apex Court in the case of M/s. Steel Authority of India Ltd. (supra). We have considered the submissions made by learned counsel for the parties and perused the record. The order of the Tribunal has been challenged where following questions of law were formulated, which are quoted hereunder for ready reference : Whether the appellant is required to pay interest on differential duty which was p .....

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this Court in the case of Commissioner of Central Excise, Pune v. SKF India Limited reported in [2009] 239 E.L.T.385. We quote hereinbelow relevant observations made in the case of SKF India Limited [supra], which reads as follows: 9. Section 11A puts the cases of non-levy or short levy, non-payment or short payment or erroneous refund of duty in two categories. One in which the non-payment or short payment etc. of duty is for a reason other than deceit; the default is due to oversight or some m .....

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Section 11A, however allow the assessees in default in both kinds of cases to make amends, subject of course to certain terms and conditions. The cases where the non-payment or short payment etc. of duty is by reason of fraud collusion etc. are dealt with under Sub-section (1A) of Section 11A and the cases where the non-payment or short payment of duty is not intentional under Sub-section (2B). 10. Sub-section (2B) of Section 11A provides that the assessee in default may, before the notice issue .....

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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 p .....

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al duty by the assessee at the time of issuance of supplementary invoices to the customers demanding the balance of the revised prices clearly falls under the provision of Subsection (2B) of Section 11A of the Act. 12. The Bombay High Court, Aurangabad Bench, in its decision in The Commissioner of Central Excise, Aurangabad v. Rucha Engineering Pvt. Ltd. (First Appeal No. 42 of 2007) that was relied upon by the Tribunal for dismissing the Revenue's appeal took the view that there would be no .....

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rom their customers. The differential duty was due at that time i.e. when the revised rates applicable with retrospective effect were learnt by the Assessee, which was much after the clearance of the goods and therefore, question of payment of interest does not arise as the duty was paid as soon as it was learnt that it was payable. Finding that provisions of Section 11A(2) and 11A (2B) were not applicable as the situation occurred in the instant case was quite different, Section 11AB(1) was not .....

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a higher value and those were cleared on short payment of duty. The differential duty was paid only later when the assessee issued supplementary invoices to its customers demanding the balance amounts. Seen thus it was clearly a case of short payment of duty though indeed completely unintended and without any element of deceit etc. The payment of differential duty thus clearly came under Subsection (2B) of Section 11A and attracted levy of interest under Section 11AB of the Act. 8. Section 11A .....

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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 be exempt from interest charg .....

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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 los .....

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that case, assessee had made a claim for refund of excise duty on the differential between the price on the date of removal and the reduced price at which tyres were sold. The price was approved by the Government. In that case, the assessee submitted that its price list was approved by the Government on 14th May, 1983, but subsequent thereto, on account of consumer resistance, the Government of India directed the assessee to roll back the prices to pre-14th May, 1983 level and on that account, .....

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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 judgement 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 judgement of this Court in the case of SKF India Limited [supra] is squarely applicable to the facts of this case. The is .....

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fies the value on date on removal and thereby, the payment of enhanced duty would attract the interest from the date of removal of goods. The interest was held leviable as per Section 11AB of the Act of 1944. It was further made clear that value, which is function of the price on the date of removal/clearance of the goods and the price indicated by the supplementary invoices is directly relatable to the value of goods on the date of clearance, interest would be chargeable accordingly. We find th .....

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