TMI Blog2008 (9) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... h on reference. The dispute relates to liability of the manufacturers to pay interest on the differential duty of excise in the case of provisional assessment under Rule 7 of the Central Excise Rules, 2002 where the duty is paid suo motu before finalization of assessment. It appears from the referral order that at the time of hearing of these appeals before the Division Bench, reliance was inter alia placed on M/s. Karnataka Vidyuth Karkhane Ltd. v. CCE, Bangalore - 2007 (78) RLT 621 (CESTAT-Ban.) in which it has been held that "interest provision would be applicable after the expiry of the period of one month from the date when the amount is determined". The Division Bench took the view that whether the difference of duly is paid prior to the finalization of provisional assessment under sub-rule (3) or later, interest has to be paid on the differential amount from the first day of the month succeeding the month for which the duty is determined as provided in Rule 7(4), but as this view was in conflict with the decision in M/s. Karnataka Vidyuth Karkhane Ltd. (supra), directed that the records of these appeals be placed before the President for constituting the Larger Bench to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity against the confirmation of demand but without success. 4. The facts of the case of M/s. Ennore Foundries Limited are more or less similar except that there was no clearance of excisable goods to a sister unit and therefore the clearances involved sale and Rule 8 was not applicable. However, in this case there was a different reason for provisional assessment - which was allowed by the jurisdictional Assistant Commissioner - namely, that clearances had been made under contracts containing a price variation clause, and therefore, the value of certain inputs which were required to be included for determining the assessable value of the final product was not ascertainable. Like M/s. Bimetal Bearings Limited they also suo motu worked out the duty liability and paid differential duty before the assessment came to be finalized by the assessing authority. A similar demand of interest on the differential amount of duty having been made and confirmed by the Assistant Commissioner and the appeals therefrom having been dismissed by the appellate authority, they have approached this Tribunal in the present appeals challenging the said orders. 5. As the dispute revolves around Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, that is, after the assessment is finalization and that the assessed duty is paid. Where the differential duty is paid suo motu before finalization of assessment, he is not liable to pay interest on the amount. Counsel placed reliance on the instruction of the Central Board of Excise Custom contained in para 2.7of part IV (Provision Assessment) of chapter 3 of CBEC's Excise Manual of supplementary Instruction, 2005 which reads as under:- "If the assessee is in a position to ascertain the duty himself, he may pay the duty on his own at the earliest and in that case he will not have to incur interest on account of time taken by the Department to finalise assessment and communicate the amount". 7. The reliance on the Board's instructions (supra) is totally misconceived. The 'instruction' merely stipulates that the assessee will not be liable to pay interest on account of any delay on the part of the Department in finalization of assessment after payment of duty. The word "duly" in the sentence "he may pay the duty …. "clearly means full duty. Where the full duty stands paid, any delay on the part of the Department ii finalization of assessment cannot cause any disadv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. Therefore, whether differential duty is paid prior to or subsequent to final assessment, but beyond the due date, will make no difference. It is difficult to appreciate as to how an assessee can deny the liability to pay interest on the amount of duty. As a matter of fact, as held by the Supreme Court in Commissioner of Trade Tax v. M/s. Kanhai Ram Thekedar, 2005 (185) E.L.T. 3 (S.C.) 2005-TIOL-76-SC-CT, no show cause/demand notice is required to be given before passing order regarding interest. 10. In the ordinary course, the assessee is required to pay the duty by the fifth day of the succeeding month on monthly basis. Provisional assessment is a concession allowed to the assessee where he is unable to determine the value of the excisable goods or determine the rate of duty applicable to such goods. The request for provisional assessment can be accepted "for reasons to be recorded in writing" which mean the request is not to be routinely granted as a matter of course. Further, under sub-rule (2) of Rule 7, the assessee is required to execute a bond in the prescribed form and, also, furnish surety or security to the satisfaction of Assistant/Deputy Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - which is also not the subject matter of the present reference - in details. We may nevertheless observe, prima facie, that the plea overlooks the fact that credit can be taken only of the duty paid and not interest. 13. It was also submitted that where the assessee voluntarily pays duty before issuance of show cause notice he should not be saddled with interest. Counsel submitted that Tribunal has consistently taking this view and in this regard he placed reliance on certain decisions of the Tribunal. We are of the view that Rule 7 of the Central Excise Rules is a self-contained law in the matter of a provisional assessment. The decisions cited by the Counsel were rendered in t context of imposition of penalty. Reference was also made to Sections 11AA and 11AB of the Central Excise Act. On a bare reading it is clear that these provisions contemplate a different situation, the only relevance of these provisions is that interest will have to be calculated at the rate specified in the notification issue under Section 11AA or Section 11AB as provided in Rule 7(4). 14. Shri M. Kannan, Advocate appearing for M/s. Ennore Foundries Limited adopted the submission of Shri V. Balas ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
