Custom, Excise & Service Tax Tribunal
Ceat Ltd vs Commissioner Of Central Excise, Nashik on 17 January, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. E/88236,88237/2013-Mum. & E/294/2012-Mum. (Arising out of Order-in-Appeal No.RPS/157 & 158/NSK/2013 dt. 29.05.2013 and AKP/NSK/208/2011 dt. 23.12.2011 passed by the Commissioner of Central Excise & Customs (Appeals) Nashik ) For approval and signature: Honble Mr. S.S. Kang, Vice President Honble Mr. P.K.Jain, Member (Technical) ============================================================
1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
authorities?
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CEAT Ltd.
:
Appellant
VS
Commissioner of Central Excise, Nashik
:
Respondent
Appearance
Shri Gajendra Jain, Advocate for Appellant
Shri B.S. Meena, Additional Commissioner (A.R) for respondent
CORAM:
Mr. S.S. Kang, Vice President
Mr. P.K. Jain, Member (Technical)
Date of hearing : 17/01/2014
Date of decision : /01/2014
ORDER NO.
Per : P.K. Jain
Common issues is involved in all the three appeals and are therefore being taken up together.
2. The appellants are manufacture of Tyres, Tubes & Flaps these finished products are transferred to various distribution centers, sales depots and C & F agencies to be sold in the replacement market. At the time of clearance from the factory, appellants are not able to precisely determine the value of the goods as they grant various discounts, abatements etc. It is therefore not possible for them to do the self assessment at the time of clearance. Accordingly they are clearing the goods on provisional assessment basis under Rule 7 of the Central Excise Rules 2002. After completion of the financial year they get their accounts audited and they are submitting certificate from CA/Cost Accountant giving the details of the sales value, various discounts given etc. Alongwith these details, they also calculate the value (and hence differential duty amount) on which they are required to pay the excise duty. They submit these details to the Divisional Dy./Assistant Commissioner for finalization of the provisional assessment for the previous year. While furnishing these details to the Deputy/Assistant Commissioner they also pay the differential duty without waiting for formal order of Deputy/Assistant Commissioner. Order of finalization of the assessment is issued by the Deputy/Assistant Commissioner after few weeks/months (which is after payment of differential duty).
3. The issue in dispute is whether they are liable to pay interest on the differential duty that would commence from the month succeeding the date on which the duty was due and payable in relation to the goods cleared till the date of payment of differential duty.
4. Heard both sides.
5. Learned Counsel for the appellant draws our attention to the Tribunals decision in the case of Ispat Industries Ltd. Vs. Commissioner of C. Ex., Nagpur reported in 2007 (209) E.L.T. 280 (Tri.-Mumbai) which has been upheld by the Honble Bombay High Court as reported in 2010 (259) ELT 662(Bom.) Ld. Counsel also stated that the said decision was followed by the Tribunal in the case of Tata Motors Ltd. Vs. Commissioner of Central Excise, Pune-I reported in 2011 (269) E.L.T. 415 (Tri.-Mumbai). Learned Counsel further stated that appeal against the said order was also dismissed by the Honble Bombay High Court.
6. Learned A.R. on the other hand stated that in the scheme of Central Excise Administration duty relating to clearance in a particular month is required to be paid by 5th/6th of the succeeding the month. If the duty is not paid by the said stipulated date manufacture is required to pay the interest on the duty amount from the said date till he pays the duty. This proposition is true whether it is a case of default in payment of duty or provisional assessment or due to short levy or non-levy or for any other reason. The learned A.R. further stated that Rule 7 of the Central Excise Rules 2002 deals with provisional assessment. Rule 7 (4) specifically provides that interest is required to be paid on any amount payable from the first day of the month succeeding the month for which such amount is determined, till the date of payment thereof. Learned A.R. further stated that this issue is squarely covered by the Larger Bench decision in the case of Cadbury India Ltd. Vs. Commissioner of Cus. & C. Ex. Pune-I reported in 2008 (232) E.L.T. 224 (Tri.LB). Ld. A.R. further stated that similar view has been taken by the Tribunal in the case of Bharat Heavy Electricals Ltd. Vs. Commissioner of C.Ex. Bhopal reported in 2012 (275) E.L.T. 614 (Tri.-Del.). Learned A.R. also drew attention to the Honble High Court of Karnataka judgement in the case of Commissioner of Central Excise Mysore-I Vs. J.K. Industries Ltd. reported in 2011 (268) E.L.T. 168 (Kar.). The same judgement was also followed in the case of Commissioner Vs. Karnataka Vidyuth Karkhane Ltd. reported in 2012 (281) E.L.T. A105 (Kar.). Learned A.R. further contended that the issue relating to interest has also been discussed by Honble Supreme Court in the case of Commissioner of Central Excise, Pune Vs. SKF India Ltd. reported in 2009 (239) E.L.T. 385 (S.C.). Honble Supreme Court has further followed the said decision in the case of Commissioner of Central Excise Vs. International Auto Ltd. reported in 2010 (250) E.L.T. 3 (S.C.). Learned A.R. further stated that the Tribunals judgment in the case of Ispat Industries Ltd. was by a Single Member who examined the issue with reference to Rule 7(4) alone and ignored other Rules and matter was not examined in detail. Moreover, judgments of Honble Supreme Court and Honble Karnataka High Court were not taken into consideration as these were not available/not mentioned. Learned A.R. stated that the same position continued before the Honble Bombay High Court. Learned A.R. further stated that these judgments of Honble Supreme Court/Karnataka High Court/Larger Bench of Tribunal and other judgments have analyzed the legal position in detail. In view of this position, the said judgments have to be considered as per incuriam and cannot be applied in general. Learned A.R. stated that in view of the analysis done in the Larger Bench decision, of the Tribunal (Supra) Honble Karnataka High Court decision (Supra) as also in the case of Bharat Heavy Electricals Ltd. (Supra) appeals are required to be dismissed.
7. We have considered the rival submission. Under new Central Excise Rules, 2002 Rule 6 provides for self assessment by assessee. Provisional assessment is also resorted to at the request of assessee when it is not possible for him to self assess the duty liability at the time of clearance. It is also seen in these cases the provisional assessment was ordered at the request of the appellants and it was made clear that appellants would be required to pay the interest from the due date to the date of payment. Rule 8 of the Central Excise Rules details the manner of payment of duty. Sub-Rule (1) of Rule 8 reads as under:
RULE 8. Manner of payment. (1) The duty on the goods removed from the factory or the warehouse during a month shall be paid by the 6th day of the following month, if the duty is paid electronically through internet banking and by the 5th day of the following month, in any other case.
Sub-Rule (3) of Rule 8 reads as under:
(3) If the assessee fails to pay the amount of duty by due date, he shall be liable to pay the outstanding amount along with interest at the rate specified by the Central Government vide notification under section 11AB of the Act on the outstanding amount, for the period starting with the first day after due date till the date of actual payment of the outstanding amount.
(Emphasis Supplied) Further Rule 7(4) reads as under:
4) The assessee shall be liable to pay interest on any amount payable to Central Government, consequent to order for final assessment under sub-rule (3), at the rate specified by the Central Government by notification issued under section 11AA or section 11AB of the Act from the first day of the month succeeding the month for which such amount is determined, till the date of payment thereof.
A combine and harmonious reading of the Sub-Rule (1) and (3) of Rule 8 and Sub-Rule (4) of Rule 7 indicate that the underlying principle is that for the goods cleared in a particular month, duty is required to be paid by 5th/6th of the succeeding month. For delay in payment of duty (part or full) for whatsoever reason, interest is required to be paid from the first day of the month succeeding the month for which such duty is determined to the date of payment of duty. This view also get supported by provisions of Section 11AB.
SECTION [11AB. Interest on delayed payment of duty.(1) 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 is liable to pay duty as determined under sub-section (2), or has paid the duty under sub-section 2(B), of section 11A, shall, in addition to the duty, be liable to pay interest at such rate not below 3[ten per cent.] and not exceeding thirty-six per cent. per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, from the first date of the month succeeding the month in which the duty ought to have been paid under this Act, or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2), or sub-section (2B), of section 11A till the date of payment of such duty:
8. Ld. A.R. has quoted the Larger Bench decision of this Tribunal in the case of Cadbury India Ltd. Vs. Commissioner of Cus. & C. Ex., Pune reported in 2008 (232) E.L.T. 224 (Tri.-LB). The relevant para reads as under:-
28.?The learned Counsel of the appellants has laid great emphasis on the Rule 7(4) of the Central Excise Rules, 2002 which states that an assessee shall be liable to pay interest on any amount payable to the Central Government, consequent to an order for final assessment under sub-rule (3), which means that question of paying interest would arise only and only if on final assessment when Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise comes to a conclusion that amount is due and payable by the assessee towards duty. If no dues are payable by the assessee upon finalization, inasmuch as the entire amount has been paid before the finalization, then the provisions of Rule 7(4) will not come into picture. In support of this argument, he referred to the provisions of Section 18(3) of the Customs Act, 1962, which deal with the identical situation and say that the importer/exporter shall be liable to pay interest on any amount payable to the Central Government, consequent to an order for final assessment under sub-section 2, at the rate fixed by the Central Government under Section 28AB from the first day of the month in which duty is provisionally assessed till the date of payment thereof. It was pleaded that under the Customs Act, the intention of the Government to charge interest from the first day of the month in which the duty is provisionally assessed has been made clear, which is not so in the case of Rule 7(4) of Central Excise Rules, 2002. We are not impressed by this plea of the appellants. They have, while disputing the liability to pay interest from the month for which the assessment was made provisional, have referred to Rule 7(4), which says that an assessee shall be liable to pay interest, consequent to an order for final assessment and, therefore, once the entire amount has been paid before final assessment, the question of payment of interest, consequent to order of final assessment does not arise. However, the learned Counsel has failed to notice that similar wording appear in Section 18(3) of the Customs Act, 1962, which also say that that importer/exporter shall be liable to pay interest on any amount payable to the Central Government, consequent to an order for final assessment under sub-section (2)........ This makes it clear that even under the Customs Act, the legal liability to pay interest arises consequent to finalization of assessment and not before that. Thus, the provisions of Customs Act in no way, support the plea of the learned Counsel of the appellants. The only difference in the Customs Act and the Central Excise Act is that, while under Customs Act, the liability to pay interest arises from the month, in which assessment was made provisional, whereas under the Central Excise Act, the liability to pay interest arises from the first day of the month succeeding the month for which the assessment was finalized. This is in the view of the fact that under the Central Excise Act, the duty liability can be discharged by the 5th of the month following the month in which the goods were cleared, whereas under the Customs Act it has to be discharged before the clearance of the goods.
29.?We further note that in the scheme of the Central Excise, the Returns are filed on monthly/quarterly basis and the assessments are made on monthly or quarterly basis. Therefore, the provisional assessment has to be finalized for every month separately and it is for this reason that Rule 7(4) refers to the month for which the assessment is finalized. As assessment is to be finalized for each and every month separately, the words used in Rule 7(4) are for the month as the differential duty is to be paid for every month.
30.?In view of this, we are of the view that interest is required to be paid even when the differential amount is paid before the finalization of assessment.
31.?Hence, we answer the reference as under :
(a) In the case of provisional assessment under the Central Excise Rules, 2002 interest is required to be paid from the first day of the month succeeding the month for which such amount is determined.
(b) Interest is required to be paid even if the differential amount is paid before the order, under the Rule 7(3) of the said Rules, is issued finalizing the assessment
9. Ld. A.R. has quoted the decision of Tribunal in the case of Bharat Heavy Electricals Ltd. Vs. Commissioner of C. Ex., Bhopal reported in 2012 (275) E.L.T. 614 (Tri.-Del). The relevant para reads as under:-
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 clearly provides that the Central Government may make rules including rules conferring powers to issue Notification with retrospective effect under those rules to carry into effect the purposes of the said Act. Sub-section (2)(ibb) provides that in particular and without prejudice to the generality of the power granted under sub-section of Section 37, such rules may provide for charging of interest on the differential amount of duty which becomes payable or refundable upon finalization of all or any 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 finalization of the assessement. Rather it specifies that the Rules may provide for interest on the differential amount of duty becoming payable consequent upon the finalization of assessment. The expression becoming payable would obviously relate to the date on which the duty was required to be paid. Considering the provisions of Section 4 of the said Act, the duty becomes payable on each removal of the goods consequent to the manufacture thereof. Being so, the expression becomes payable under Section 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 assessment. And that too merely because the assessee was not able to ascertain the exact quantum of duty in the absence of sufficient material to finalize the valuation of the goods at the time of clearance of goods. That would not extend or change the due date for payment of duty. The due date for payment of duty is statutorily fixed being the date of removal of the goods consequent to the manufacture thereof, as the same cannot be changed by misinterpreting the provisions relating to the power 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 provisions therefore, specifically states that the interest liability will commence from the month succeeding the month for which such amount is determined. The expression for refers to the month for which the amount is determined pursuant to finalization of assessment. Apparently, it discloses that the interest liability would commence from the month succeeding the day on which the duty was due and payable in relation to the goods cleared. In case the contention of the Advocate for the appellants 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.
10. Ld. A.R. has quoted the Judgment of Honble Supreme Court in the case of Commissioner of Central Excise, Pune Vs. SKF India Ltd. reported in 2009 (239) E.L.T. 385 (S.C.). The relevant para reads as under:-
11.?The payment of differential 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 sub-section (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. M/s. Rucha Engineering Pvt. Ltd., (First Appeal No. 42 of 2007) that was relied upon by the Tribunal for dismissing the Revenues appeal took the view that there would be no application of Section 11A (2B) or Section 11AB where differential duty was paid by the assessee as soon as it came to learn about the upward revision of prices of goods sold earlier. In M/s. Rucha Engineering the High Court observed as follows:
It is evident that the Section (11AB) comes into play if the duty paid/levied is short. Both, the Commissioner (Appeals) and the CESTAT have observed that the Assessee paid the duty on its own accord immediately when the revised rates became known to them from 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 at all applicable, and therefore, the Assessee was not required to pay interest.
13.?It further held that a case of this nature would not fall in the category where duty of excise was not paid or short-paid.
14.?We are unable to subscribe to the view taken by the High Court. It is to be noted that: the assessee was able to demand from its customers the balance of the higher prices by virtue of retrospective revision of the prices. It, therefore, follows that at the time of sale the goods carried 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 sub-section (2B) of Section 11A and attracted levy of interest under Section 11AB of the Act.
11. Ld. A.R. has quoted the another Judgment of Honble Supreme Court in the case of Commissioner of Central Excise Vs. International Auto Ltd. reported in 2010 (250) E.L.T. 3 (S.C.). The relevant para 8 is as under:-
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 be exempt from interest chargeable under Section 11AB of the Act. What is stated in Explanation (2) to sub-section 2(B) is reiterated in Section 11AB of the Act, which deals with interest on delayed payment of duty. From the Scheme of Section 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 judgement of this Court in the case of M.R.F. Limited [supra] would not apply. That judgement was on interpretation of Section 11B of the Act, which concerns claim for refund of duty by the assessee. That judgement was in the context of the price list approved on 14th May, 1983. In 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, price differential arose on the basis of which the assessee claimed refund of excise duty which stood rejected by this Court on the ground that once the assessee had cleared the goods on classification, the assessee became liable to payment of duty on the date of removal and subsequent reduction in the prices for whatever reason cannot be made a matter of concern to the 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.
12. Ld. A.R. has quoted the Judgment of Honble Karnataka High Court in the case Commissioner of Central Excise Mysore-I Vs. J.K. Industries Ltd. reported in 2011 (268) E.L.T. 168 (Kar.) The relevant para reads as under:-
8.?In the light of the aforesaid contentions, in order to answer the substantial question of law, it is necessary to look into the provisions in the Act and the Rules.
9.?Section 11A of the Act provides for recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. It provides that duty is payable as per the provisions of the Act or Rules made thereunder. The Act by itself will not stipulate the date on which the duty is payable.
10.?Rule 8 of the Central Excise Rules, 2002 provides for manner of payment. Sub-rule (1) of Rule 8 provides that duty on the goods removed from the factory or the warehouse during a month shall be paid by the 6th day of the following month if the duty is paid electronically through internet banking and by the 5th day of the following month in any other case. Therefore the said Rule provides for the date on which the duty is paid. If the duty is not paid on the appointed date. Section 11A provides for recovery of duty not levied or not paid or short levied or short paid or erroneously refunded.
11.?Rule 6 provides for assessment of duty, where the assessee shall himself assess the duty payable on any excisable goods and pay the same. However, where the assessee is unable to determines the value of the excisable goods or determine the rate of duty applicable thereto, Rule 7 provides for provisional assessment. Under the said provision, the assessee may request the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in writing, giving reasons for payment of duty on provisional basis and the authority may order allowing payment of duty on provisional basis at such rate or on such value as may be specified by him. The payment of duty on provisional basis is allowed subject to assessee executing a bond binding himself to pay the difference between the amount of duty as may be finally assessed and the amount of duty provisionally assessed. Thereafter, within a period not exceeding six months from the date of communication of the order of provisional assessment, the aforesaid authorities shall pass an order for final assessment. Then, under sub-rule (4), the assessee shall be liable to pay interest on any amount payable to Central Government, consequent to the order of final assessment under sub-rule (3), at the rate specified by the Central Government by notification issued under Section 11AA or Section 11AB of the Act from the first day of the month succeeding the month for which such refund is determined, till the date of payment thereof.
12.?Section 11AB provides for Interest on delayed payment of duty. It provides, 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 is liable to pay the duty as determined under sub-section (2) or has paid the duty under sub-section (2B) of Section 11A shall in addition to the duty, be liable to pay interest at such rate not below 10% and not exceeding 36% per annum from the first day of the month succeeding the month in which the duty ought to have been paid under this Act.
13.?The Tribunal has read those provisions as to mean that interest is liable to be paid within one month from the date of final assessment order, as the liability to pay duty is finally determined with the passing of the final assessment order. Therefore the liability to pay interest also arises only when the assessee does not pay the duty as determined by the final assessment order. We find it difficult to accept the said interpretation placed by the Tribunal on this provision, namely, Rule 7(4).
14.?In fact, sub-section (3) of Section 11A defines the word, relevant date as under :
(3)(ii)(C)(b) relevant date, means, -
in the case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof.
15.?Therefore, the Parliament consciously has not stated that the relevant date on which the adjustment of duty is made is the date of final assessment thereof. In the final assessment, the rate of duty payable is finally determined. That was the duty which was payable by the assessee under Rule 8 on the 6th date of the following month if the duty is paid subsequently through internet banking and on the 5th day of the following month in any other case. Therefore the adjustment of duty is to be made on that date. Not after the determination by the final assessment order. All that happens in the final assessment order is, the rate of duty payable is determined. The adjustment is to be made on the date it was actually liable to be paid. Therefore, if the duty paid under a provisional assessment is less than what is determined in the final assessment, it is a case of short payment of duty. Therefore interest is payable on that short payment of duty from the due date, the relevant date being the day on which the duty is to be adjusted. Therefore, the date of provisional assessment and the date of final assessment have no relevance in deciding the payment of interest. The date on which duty is payable is provided under the Rules. If the duty determined to be paid under the final assessment is not paid on the due date, if it is short paid, not only the assessee has to pay the balance in duty, he is also liable to pay interest on such short payment of duty from the due date. The only advantage is, he will get the benefit of one month from the said due date as is clear from Rule 7(4). Therefore, the order passed by the Tribunal holding that interest is payable from one month from the date of final assessment order is erroneous and is liable to be set aside.
16.?It is submitted that this is a case where the assessee has paid excess duty and if that duty is adjusted, there is no liability to pay duty at all, there is no short payment and therefore the question of payment of interest would not arise. That is the matter to be considered by the Assessing Authority and if the assessee has paid excess duty or if the differential duty has been paid before the final assessment order, the Assessing Authority has to consider the liability of interest in the light of the aforesaid provision and pass appropriate orders and grant relief to the assessee if he is entitled to in law.
17.?In that view of the matter, the appeal is allowed. The impugned order is hereby set aside. The substantial question of law is answered in favour of the Revenue and against the assessee.
13. In view of the above mentioned decisions of the Honble Supreme Court, Honble High Court of Karnataka and the Larger Bench decision in the case of Cadbury India Ltd. as also decision of this Tribunal in the case of Bharat Heavy Electricals Ltd. (supra), as also harmonious reading of Rule 7(4), 8(1) and 8(3) of Central Excise Rules, 2002, we are of the considered view that appellants are required to pay the interest. The fact that they have paid the duty before formal finalization order issued by the Deputy/Assistant Commissioner will not make any difference to the said position. We also note that the judgments of this Tribunal in the case of Ispat Industries Ltd. and Tata Motors Ltd. which were upheld by Honble Bombay High Court are per incuriam as the details of various Rules as also the judgment of the Honble Supreme Court, Honble High Court of Karnataka and other judgements of this Tribunal were not brought to the notice of the Tribunal or the Honble Bombay High Court. We also note some of these judgments are subsequent to the judgment in the case of Ispat Industries Ltd. and Tata Motors Ltd.
14. In view of above analysis, all the three appeals are dismissed.
(Pronounced in court on ..) (S.S. Kang) Vice President (P.K. Jain) Member (Technical) Sm ??
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