Section 11 A Of the central excise act – pay- Ment of different duty at the time of issue of supplementary invoices – SCN issued after one year for demanding ‘interest’ on such differential duties paid by the assesses – held such notices are barred by limitation

.

Neel Metal Products Ltd. Vs. CCE [2014] 50 Taxmann.com 225 ( Punjab & Haryana )

Facts:

The assessee, a manufacturer of auto components, sheet metal components and tools entered into long term contracts with automobiles companies for sale of finished excisable goods. On price revision, differential excise duty was paid at the time of issue of supplementary invoices. The question is whether the liability to pay interest on differential excise duty already paid at the time issue of supplementary invoices would continue and can be demanded beyond the normal period of limitation of one year from the date of supplementary invoices u/s. 11A read with 11AB of the act

HELD

The high Court observed that the matter was squarely covered by its decision in the case of Jai Bharat maruti Ltd.’s Case {[2014] 50 taxmann.com 224. It also observed that the decision of the Delhi high court in the case of Quality ice cream company vs. UOL 2012(281) ELT 507 (DEL) and decision of the supreme court in the case of commissioner vs. TVS Whirlpool Ltd. 2000 (119) ELT. A 117 (SC) are the leading authorities which answer the question in Favors of the assessee. The Supreme Court has held that, the period of limitation that applies to a claim for the principal amount should also apply to the claim for interest thereon. Based on this principal laid down by the Apex court. The appeal was allowed and notices demanding interest were held without jurisdiction.