M/S. SHAKTHI CABLES PVT. LTD. Vs. THE COMMISSIONER OF CUSTOMS & CENTRAL EXCISE HYDERABAD-I COMMISSIONERATE HYDERABAD

JUDGEMENT

(1.) THERE is no representation for the appellant despite notice, nor any request for adjournment. On a perusal of the record, I find that the issue involved in this case is already covered by binding case law. In the circumstances, I am inclined to dispose of this appeal. The appellant had cleared their excisable products on payment of duty based on the price originally agreed with the buyers, during the period from March 2004 to March 2008. Subsequent to such clearance, the buyers agreed for enhancement of price as per the price variation clause of the relevant contract. The appellant accordingly issued supplementary invoices for recovery of the differential price from the buyers and for payment of the differential duty thereon. Though the differential duty was paid, no interest thereon was paid by the appellant. Therefore the department issued show -cause notice for recovery of interest under Section 11AB of the Central Excise Act on the amount of differential duty from the date of clearance of goods to the date of payment of differential duty. This show -cause notice, of course, sought to appropriate the differential duty also. Penalties were also proposed under Section 11AC of the Central Excise Act and Rule 25 of Central Excise Rules, 2002. These proposals were contested by the assessee. In adjudication of the dispute, the learned Additional Commissioner appropriated the differential duty amount under Section 11A of the Act and demanded interest thereon amounting to Rs.3,20,017/ - under Section 11AB of the Act. A penalty of Rs.1 lakh was imposed on the assessee under Section 11AC ibid. The learned Commissioner (Appeals), in an appeal filed by the assessee, sustained the view taken on the substantive issue by the original authority but vacated the penalty. Hence the present appeal of the assessee is against the demand of interest on the amount of differential duty.

(2.) THE learned Deputy Commissioner (AR) submits that the question whether interest is leviable under Section 11AB of the Act on an amount of differential duty paid by a manufacturer of excisable goods under supplementary invoices issued to his buyers by invoking the price escalation clause of the contract between them is no longer res integra inasmuch as it was settled in favour of the Revenue by the Supreme Court in the case of Commissioner vs. SKF India Ltd. :, 2009 (239) E.L.T. 389 (SC) as clarified by the Court in its subsequent judgment in CCE vs. International Auto Ltd.: : 2010 (250) E.L.T. 3 (SC). The learned Deputy Commissioner (AR) has also cited certain orders of the Tribunal which relied on the ruling of the apex court. The Hon'ble Supreme Court, on a similar set of facts, held that the payment of differential duty was under sub -section 2(B) of Section 11A of the Central Excise Act and, therefore, interest was leviable thereon under Section 11AB of the Act. This ruling is squarely applicable to the appellant. In the result, the appeal gets dismissed.