Case Law Details
Brief Facts of the Case
The Appellants are engaged in manufacture of tyres, tubes and flaps falling under Chapter Heading 40 to the First Schedule of the Central Excise Tariff Act, 1985. The period relevant for the purpose is April 2010 to March 2011. The Appellant cleared the manufactured goods, to their depot/C & F Agent etc. for subsequent sale in the replacement market and secondly, the original equipment manufacturers or other buyers from the factory gate.
They cleared the aforesaid manufactured goods on payment of central excise duty as per the value determined in terms of section 4(1)(a) and section 4(1)(b) of the Central Excise Act. Thus, the Assessee paid the duty on the transaction value/normal transaction value as the case may be. The Assessee has set out the details, the mode of computation and the tax amount and stated that in cases of clearance of their goods to depot/distribution centres/C & F Agencies for sale in the replacement market, the normal transaction value, namely, the price actually to be realized was not known. This was because the Assessee claimed certain deductions and permissible in terms of this statute. Since these deductions could not be quantified they were determined ad hoc. In the light of the above, it was not possible for the Assessee to do the self assessment at the time of clearance. Therefore, the Appellants cleared the manufactured goods on provisional assessment basis under Rule 7 of the Central Excise Rules, then, prevailing.
The Superintendent of Central Excise for finalization of the provisional assessment for the particular financial year. While furnishing the aforesaid details to the concerned authorities, pertinently, the Appellants also paid the differential duty without waiting for normal order of Deputy/Assistant Commissioner finalizing the provisional assessment. Thus, during the relevant period the Appellants had paid the differential duty amount before passing of order for finalization of assessment.
A notice to show cause-cum-demand came to be issued on seeking to recover from the Assessee the interest of Rs.5,11,090/- under Rule 7(4) of the Central Excise Rules read with section 11AB of the Act on the amount of differential duty paid on the finalization of provisional assessment by the Appellants during the relevant period. The matter has been adjudicated by Commissioner (Appeals) and CESTAT against the assessee. Being aggrieved by the said order, the appellants preferred an appeal before this court.
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The similar provision is there in customs also for interest in case of differential duty against provisional assessment u/s 18.
the interpretation coming out in this ruling of supreme court can be made applicable for customs provisional assessement as well.
however, the CBEC has issued a circular no. 40/2011 clarifying that interest needs to be paid if any amount is paid before finalisation of assessement.
Any inputs in this is welcome.
Regards,