No interest on differential duty amount

CHATROOM

Several judgments affirm that appellants need not pay duty as this is not a case of non-levy or short-levy

We have supplied certain goods against excise invoice based on the price agreed. Subsequently, we negotiated with the buyer and he agreed for price escalation. We raised a supplementary invoice and paid duty on the same. The audit memo now states that we have to pay interest on the differential amount. Are we liable to pay interest?

In the case of HV Axler Ltd versus CCE, Ranchi [2007 (215) ELT 70 (Tri.-Kolkata)], the Tribunal has held that "assessments involving price escalation, are deemed to be provisional and hence the amounts which have been paid after the final value was determined applying price escalation are akin to payment on finalisation of the provisional assessment.

Accordingly, no interest is payable by the appellants on the differential duty amount paid by them voluntarily, as this is not a case of non-levy or short-levy."

In the case of CCE, Jaipur versus Rajasthan Explosives and Chemicals Ltd [2007 (215) ELT 102 (Tri Delhi} also it was held that "the respondent cleared the goods on payment of duty and therefore, there is no short levy or short paid. The respondent paid the differential duty on the revision of price and therefore, the payment of interest under Section 11AB of the said Act cannot be applicable."

In the cases of CCE, Bhopal versus DK Electrical Industries [2007 (215) ELT 208 (Tri-Delhi)] and CCE, Pune-III Vs Kalyani Carpentra Special Steel Ltd. [2007 (214) ELT 550 (Tri-Mumbai) also similar views have been taken that interest is not payable on the differential amount in case of price escalation.

Our company acquired another company in the year 2004-05. Together, we meet the minimum qualifying limit under the Target Plus scheme and also the incremental growth criterion. Our application, however, is held up and we have not got the benefit. Can you please guide us?

The licensing authorities were taking divergent views in such situations and so, the DGFT has recently issued Policy Circular no. 24/2007 dated January 1, 2008.

It says that the eligibility criteria should be met by eligible export turnover of any of the companies prior to such merger acquisition and the incremental growth is to be seen with respect to the total of the pre-merged eligible export turnover and post merged eligible export turnover.

The cap of 100 per cent is to be seen with respect to the pre-merger eligible export turnover of the eligible pre-merged company in the relevant base year.

We are designing and developing websites for others. We do not find ay category of service tax that covers our activity. Do we have to pay service tax?

Section 65 (105) (zzzzb) covers any services provided or to be provided to any person, by any other person in relation to development and supply of content for use in telecommunication services, advertising agency services and on-line information and database access or retrieval services. Finance Act, 2007 introduced this entry and it is effective from June 1, 2007.