By TIOL News Service

MUMBAI, APR 02, 2018: THIS appeal was filed by the assessee in the year 2009.

None appeared for the appellant when the matter was posted for hearing.

The Bench observed that a SCN dated 23/12/2008 was issued on the ground that - on scrutiny of records,it was observed that the assessee had raised supplementary invoices for the price escalation received by them from their customers in respect of goods cleared earlier; that differential duty was paid in respect of the supplementary invoices raised during the period April 2006 to March 2008, however, no interest was paid; that the aforesaid details were provided by the appellant on requisition by the department.

Admittedly, the SCN demanding ‘interest' was confirmed by the lower authorities and, therefore, the appeal before the CESTAT.

The Member(Judicial) writing for the Division Bench observed thus -

++ We find that no calculation of interest has been made by Revenue, nor such calculation giving the period for which interest is demanded, had been annexed to the show cause notice.

++ We further notice that in para 9(b) of the show cause notice it is mentioned that the show cause notice is based on the data submitted by the assessee vide letter(s) dated 16/04/2008 and 24/11/2008 furnishing details of differential duty paid on supplementary invoices issued by them and interest payable thereon. However, such data has not been made part of the show cause notice by annexing the same.

++ In this view of the matter, we hold that the show cause notice is vague as it does not disclose the basis or period of default for calculation of interest being demanded from the appellant.

++ Further, we find that it is an admitted fact that the appellant had paid the duty on their own, on clearance by them on the main invoice as well as the differential duty on the supplementary invoices and there is no allegation that by virtue of differential duty on the subsequent supplementary invoices there was delay in payment of duty.

Concluding that the show-cause notice is deficient and not maintainable, the appeal was allowed by setting aside the impugned order.

In passing:

+ Board's letter F. No. 354/118/96-TRU, dated  6.1.1997 [rescinded by Master Circular 1053/02/2017-CX]

"4. Clarification has been sought for whether it is obligatory that reference to Section 11AB should be made in the adjudication orders. It is really not necessary. Section 11AB is a mandatory provision for charging interest in those cases where the amount of duty has been evaded. The section also provides the period for which the interest will have to be paid and the manner in which the interest has to be computed. Legally, therefore, interest is chargeable even if the provisions of Section 11AB are not mentioned in the adjudication order. However, it is for the adjudicating authority to consider whether they would like to refer to Section 11AB at their discretion in the adjudication order.”

+ F.No. 208/27/2003-CX.6 dated 18 December 2006. [rescinded by Master Circular 1053/02/2017-CX]

+ M/s Steel Authority of India Vs. CCE, Raipur,  2015-TIOL-292-SC-CX

(See 2018-TIOL-1031-CESTAT-MUM)