(Indira Banerjee, Surya Kant and M.M. Sundresh, JJ.)
Petition(s) for Special Leave to Appeal (C) No(s). 31488/2015, decided on September 7, 2022
Bharat Heavy Electricals Ltd. ______________________ Petitioner;
v.
Commissioner Customs and Central Excise Kanpur ___ Respondent.
Petition(s) for Special Leave to Appeal (C) No(s). 31488/2015 and CEA No. 26/2015
The Order of the court was delivered by
Order
1. Heard learned counsel for the parties.
2. The issue involved in the present case is whether the petitioner is liable to pay interest on differential duty from the date of clearance of goods, on payment of duty assessed provisionally by the Jurisdictional Assistant/Deputy Commissioner of Central Excise under Section 7(1) of the Central Excise Act, even though the provisional duty had been paid prior to the date of the passing of the final assessment order under Section 7(3) of the Central Excise Act, 2002.
3. By an order dated 09.04.2018, a Two Judge Bench of this Court directed that this matter be referred to a three Judge Bench in view of the judgment and order of this Court in Steel Authority of India Limited v. Commissioner of Central Excise, Raipur reported in (2019) 6 SCC 693. The issues involved in this matter are identical to the issues involved in Steel Authority of India Limited (Supra).
4. By an order dated 27.03.2019, a three Judge Bench of this Court adjourned this case for three months, since the judgment in Steel Authority of India Limited (Supra) had been reserved.
5. The judgment in Steel Authority of India Limited v. Commissioner of Central Excise, Raipur has since been delivered on 08.05.2019. This Court held :—
“71. We are of the view that the reasoning of this Court in the order referring the cases to us (to this Bench) that for the purpose of Section 11AB, the expression “ought to have been paid” would mean the time when the price was agreed upon by the seller and the buyer does not square with our understanding of the clear words used in Section 11AB and as the rules proclaim otherwise and it provides for the duty to be paid for every removal of goods on or before the 6th day of the succeeding month. Interpreting the words in the manner contemplated by the Bench which referred the matter would result in doing violence to the provisions of the Act and the Rules which we have interpreted. We have already noted that when an assessee in similar circumstances resorts to provisional assessment upon a final determination of the value consequently, the duty and interest dates back to the month “for which” the duty is determined. Duty and interest is not paid with reference to the month in which final assessment is made. In fact, any other interpretation placed on Rule 8 would not only be opposed to the plain meaning of the words used but also defeat the clear object underlining the provisions. It may be true that the differential duty becomes crystalised only after the escalation is finalized under the escalation clause but it is not a case where escalation is to have only prospective operation. It is to have retrospective operation admittedly. This means the value of the goods which was only admittedly provisional at the time of clearing the goods is finally determined and it is on the said differential value that admittedly that differential duty is paid. We would think that while the principle that the value of the goods at the time of removal is to reign supreme, in a case where the price is provisional and subject to variation and when it is varied retrospectively it will be the price even at the time of removal. The fact that it is known, later cannot detract from the fact, that the later discovered price would not be value at the time of removal. Most significantly, section 11A and section 11AB as it stood at the relevant time did not provide read with the rules any other point of time when the amount of duty could be said to be payable and so equally the interest. We would concur with the views expressed in SKF case (supra) and International Auto (supra). We 114 find no merit in the appeals. The appeals will stand dismissed.”
6. The issues raised in this case are squarely covered in Steel Authority of India Limited (Supra). Interest would be payable from the due date of payment of provisional duty for the purpose of removal of the goods in question till the date of payment of the balance/differential duty upon final assessment.
7. The special leave petition is, accordingly, disposed of.
8. Pending applications, if any, shall stand disposed of.
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