Case Law Details
H H Patel & Company Vs Commissioner of Central Excise & Customs (CESTAT Mumbai)
CESTAT Mumbai held that confirmation of differential duty necessarily has interest liability appended to it. Accordingly, liability to pay interest on duties short-paid at the time of clearance of goods for captive consumption does not get erased.
Facts- The appellant is in the business of manufacturing ‘loose zarda’, by deploying raw materials in specific proportions to obtain batches of 3165 kg, and had been clearing the same to their branches upon discharge of duties of central excise on cost for the period from April 1997 to December 2001 which the jurisdictional authority had held to have been incorrectly computed after exclusion of certain essential elements. The impugned order held that the value computed at ₹ 32 per kg for the period from 25th April 2001 to 29th October 2001, and at ₹ 36 per kg for the period thereafter till 31st December 2001, instead of ₹ 42.34 per kg in the revised CAS-4 prepared by the cost accountant of the appellant resulted in short-payment of duty which is not in dispute. The grievance of the appellant stems from the claim that the provision for charging interest under section 11AB of Central Excise Act, 1944 is triggered only when suppression, fraud or misrepresentation has caused evasion of duty.
Conclusion- Held that the liability to pay interest on duties short-paid at the time of clearance of goods for captive consumption does not get erased. The interest liability had not been discharged at the time of payment of differential duty and, hence, the essential precondition for the dropping of further proceedings had not been complied with. Inevitably, the confirmation of differential duty necessarily has interest liability appended to it.
FULL TEXT OF THE CESTAT MUMBAI ORDER
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