COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS VADODARA Vs. CHLORITECH INDUSTRIES
LAWS(GJH)-2008-7-92
HIGH COURT OF GUJARAT
Decided on July 22,2008

COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS Appellant
VERSUS
CHLORITECH INDUSTRIES Respondents

JUDGEMENT

- (1.) THE appellant-revenue has proposed the following question: "swhether in the facts and circumstances of the case the Tribunal erred in holding that no interest as prescribed under the provisions of Section 11-AB of the Act can be recovered when the differential duty is paid on price variation?. "
(2.) THE facts briefly stated are that the respondent-assessee is manufacturing goods which are liable to duty of excise under The Central Excise Act, 1944 (the Act ). It is the case of the appellant department that the respondent-assessee had issued supplementary invoices for rate difference on the basis of escalation clause in the purchase order and such supplementary invoices were issued between 01. 04. 2001 to 31. 03. 2004. That consideration to the tune of Rs. 1,90,89,420/- was received towards such supplementary invoices and admittedly, excise duty to the tune of Rs. 30,54,305/- has been paid voluntarily in discharge of legal obligation contained in Section 11a (2b) of the Act. That due to such delayed payments the respondent-assessee became liable to pay interest at the prescribed rate as provided in Section 11ab of the Act. After issuing show cause notice the adjudicating authority held that in light of provisions of Section 4 of the Act, and more particularly the definition of the term "stransaction value" as appearing in sub-section (3) of Section 4 of the Act, duty was payable for the goods sold on the price actually paid or payable and, therefore, there was delayed payment of duty making the respondent-assessee liable to pay interest worked out at a sum of Rs. 2,32,668/ -. The order of the adjudicating authority has been confirmed by the Commissioner (Appeals ). However, Customs, Excise and Service Tax Appellate Tribunal, Western Zonal Bench, Ahmedabad (the Tribunal) has allowed the appeal of the respondent-assessee by holding that no interest is leviable when differential duty is paid on price variation by relying upon two decisions of the Mumbai and Bangalore Benches of the Tribunal viz. (i) CCE Aurangabad Vs. Rucha Engineering (P) Ltd. 2006, (206) ELT 278 (Tri-Mumbai); AND (ii) M/s. Bharat Heavy Electricals Ltd. Vs. CCE Bangalore 2007-TROL-173-CESTAT-BANG.
(3.) LEARNED advocate for the appellant has referred to provisions of Section 4 of the Act to point out that duty of excise is chargeable on any excisable goods with reference to the value of such goods, on each removal of the goods and for the purposes of working out the value on which such duty is leviable transaction value thereof is defined to mean the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to the assessee, or by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time. Therefore, according to the learned counsel, the Tribunal had committed an error in law giving rise to a substantial question of law as proposed.;


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