Issue of Show Cause Notice for demanding interest and power of adjudication of such cases - CBEC relies on a nonexistent letter
It has been noticed that there is a practice in certain industries, especially those manufacturing motor vehicle parts, that many a time vendors raise supplementary invoices on account of revision of prices. The differential duty is paid by the vendor on the value of such supplementary invoices but interest is not paid on said differential duty.
This is the issue and Board says it had examined the issue and by letter F.No.574 /CE/5/ Misc.2003 , dated 28.07.2003 clarified that interest under section 11AB of the Central Excise Act, 1944 is payable on such differential duty.
The fact is Board had never issued such a letter. DDT is well aware that a couple of years ago there was an effort to trace this mysterious letter and they could not find it. Strangely, Board now relies on this non existent letter to advise the field on how to recover interest.
There is no equity in taxation. If for any reason, the assessee has to refund some money to his customer, he will not get a refund from the department, but if his customer pays him some money after some time, he has to pay duty as well as interest.
Now the Tribunal has referred the matter to a Five Member Bench. What started from a nonexistent circular has travelled through all possible Judicial Corridors and is now before a Five Member Bench – which certainly not the end – you still have the High Court and Supreme Court.
What started in 2003 has reached a VERY LARGER Bench in 2008 and may reach the Supreme Court in 2015!
Why can't the Board amend the Law as it wants and avoid future litigation?
We bring you this landmark judgement (which directs you to another land and mark) today.
See Breaking News .