The issue is no longer res integra as it has been settled by Hon’ble Madras High Court in case of CCEx vs Jayashree Cables & Conductors Private Limited [C.M.A. No. 266 of 2010] pronounced on 12th June, 2015.
The respondent was engaged in manufacture of cables and it entered into a contract with customer for supply of such cables & incorporated price variation clause in the agreement entered between them. The respondent paid duty provisionally at the time of removal of goods from the factory and thereafter issued supplementary invoice and paid the differential duty. However, it did not paid interest under Section 11AB of the Act, and therefore the department raised the demand of interest on such differential payment and invoked penal provisions against the company.
The Hon’ble Tribunal relying on the decision of Hon’ble Gujarat High Court in case of CCEx vs Chloritech Industries [2009 (235) ELT 17] answered the question of law in favour of the assessee. On being aggrieved by the said decision, the revenue preferred appeal before Hon’ble Madras High Court and pleaded that the decision relied upon by Hon’ble Tribunal has been reversed by Hon’ble Gujarat High Court relying on the decision of SKF India Limited [2009 (239) ELT 385].
The Hon’ble Court held that the Tribunal grossly erred in passing the order solely relying on the decision of Hon’ble Gujarat High Court without appreciating the provisions of the Act. The decision subsequently been reversed based on the decision of Hon’ble Apex Court in case of SKF India (Supra) and therefore the issue needs reconsideration. The case was remanded back to the tribunal for re-consideration in light of the legal position mentioned above.
Link to Download Full text of the Judgment
https://taxguru.in/wp-content/uploads/2015/10/Jayashree-Cables.pdf
Author – CA Nischal Agarwal
Dear Sir,
Please confirm , whether interest is applicable on supplementary invoices under GST law or not.