Interest payable on differential duty under supplementary invoices:SC

NEW DELHI. Supreme Court has overruled the decision of High Court in case of Commissioner of Central Excise, Aurangabad vs. M/s Rucha Engineering Pvt. Ltd  AIT-2007-461-HC and has ruled in case of Commissioner of Central Excise Pune Versus SKF India Ltd AIT-2009-268-SC  that 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.

SC was called upon to consider the conditions that would attract the levy of interest on excise duty not levied or short levied, not paid or short paid or erroneously refunded as provided under sections 11A, 11AA and 11AB of the Act.

 

Following the revision the assessee demanded from its customers the balance of the higher prices and issued to them supplementary invoices. At the same time it also paid the differential duty on the goods sold earlier.

SC ruled that 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.

 

SC was unable to subscribe to the view taken by the High Court. SC held that 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.

 

(Click here for full text of Ruling-AIT-2009-268-SC)

 

(Source: Allindiantaxes)

 

 

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4 Comments

  1. SUBIR GUPTA said,

    August 10, 2009 at 5:00 pm

    The Apex Court decision is necessarily to be reviewed at larger bench. The legal and just trade practices in the industry over years is intervened like a sunami only to wash away the settled position of law with the blow of substantive and different legal views wrt 11A, 11AB 11A(2B).

  2. S.C.B. said,

    August 12, 2009 at 9:00 am

    IN THE DECISION OF SC THE PROBLEM OF ASSESSEE IS IGNORED . BECAUSE AT THE TIME OF FIRST CLEARING THE PRICE OF RAW MATERIAL NEGOCIATION WAS NOT CLEARED ,.

  3. PANKAJ GUPTA said,

    August 17, 2009 at 11:06 am

    PLEASE TELL ME PERIOD OF INTEREST ON DIFFERENTIAL DUTY ON SUPPLIMENTARY INVOICE IN EXCISE

  4. Santosh Kumar Babu said,

    December 28, 2010 at 11:17 am

    WHETHER PENALTY IS APPLICABLE FOR THE SUPPLEMENTARY INVOICES AFTER PAYING THE DIFFERENTIAL DUTY AND INTEREST.

    EXCISE DEPARTMENT HAS CHARGED A PENALTY WHETHER THIS IS APPLICABLE.


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