J.P.Chaturvedi

Dear Sir, Hon,ble High Court of Gujarat in the case of Commissioner of Central Excise& Customs , Vadodara -I v/s Chloritech Industries [2009 (235) E.L.T.17(Guj,)] has held that " Interest on price escalation - Supplementary invoices - Interest under Section 11AB of Central Excise Act , 1944 not recoverable when diffeerential duty is paid on price variation - If at the given point of time when transaction took place the additional price was not fixed , the liability of buyer to pay additional amount was not known to buyer , mere existence of an escalation clause in contract between parties can not bring the subsequent escalation within the meaning of definition for purpose of levying interest - If neither side to transation was aware as to the amount which was to be charged and which was to be paid under the escalation clause on the date when the transaction was entered into , no liability to pat interest can arise under the provisions of Section 11 AB ibid". J.P.Chaturvedi