Full Judgment
2. The short facts necessary for the disposal of these appeals are as follows. Assessee was engaged in the manufacture of Polyester Film & Yarn. The period covered by this proceeding is October, 1995 to March, 1996. Assessee was declaring the price prior to 1-4-94 and was selling the goods at the declared price. After 1-4-94, they were having the invoices wherein price realised was below the value declared earlier.
On 17-7-95 also, assessee again filed a declaration before the Department showing the price of the goods. The prices realised by the assessee under the invoices for the sale between the period October, 1995 to March, 1996 were compared with the said declaration filed on 17-7-95. The price realised as per the invoice was lesser than the price declared. So, show cause notice was issued on 2-5-96 making a demand of Rs. 7,83,726/- as differential duty. A penalty of Rs. 1 lakh was also proposed to be imposed on the assessee. The adjudicating authority confirmed the demand of differential duty made in the show cause notice. He also imposed a penalty of Rs. 7,83,726/- under Rule 173Q. The adjudicating authority further directed the assessee to pay interest at the rate of 18% on the amount covered by the demand. This order of the adjudicating authority was taken up in appeal. The Appellate Commissioner confirmed the demand of Rs. 7,83,726/-. The penalty imposed under Rule 173Q was reduced to Rs. 1 lakh. Assessee was freed from the liability to pay interest at 18% as ordered by the adjudicating authority. Assessee challenges the order confirming the demand of Rs. 7,83,726/- as differential duty and penalty of Rs. 1 lakh imposed under Rule 173Q. The appeal at the instance of the Revenue challenges the waiver of interest on the amount as was done by the Commissioner (Appeals).
3. It is true that assessee made a declaration regarding the value of the goods when he filed the statement on 17-7-95 but, he sold the goods manufactured by him at a lesser price shown in the invoice. The Department has no case that the price shown in the invoice was not correct. Nor had they any case that any amount over and above the amount covered by the invoice flowed back to them from the buyers.
Under such circumstance, the price at which the goods were sold to the dealers was the sole consideration for the sale as contemplated by Section 4(1)(a) of the Act. Therefore, the Department was not justified in claiming differential duty as if the assessee realised greater price than the one shown in the invoice. In this view of the matter, the claim of differential duty as stated in the show cause notice is not justified. Result, therefore, is that the orders passed by the authorities below, namely, adjudicating authority and Commissioner (Appeals) have to be set aside. We do so. By this, the appeal preferred by the assessee succeeds. When there is no liability to pay any amount by way of differential duty, the claim for interest can not stand.
Therefore, the Revenue's appeal fails and it is dismissed.