2003 (5) TMI 251 - AT - Central Excise

Summary

Issues:
- Confiscation of assets under Rule 173Q(2) of the Central Excise Rules.
- Imposition of interest under Section 11AB of the Central Excise Act.

Confiscation of Assets under Rule 173Q(2) of the Central Excise Rules:
The appeal involved a dispute regarding the confiscation of assets, including land, building, plant, and machinery, under Rule 173Q(2) of the Central Excise Rules. The Revenue contended that as the duty liability exceeded Rs. 1 lakh, the assets should be confiscated. However, it was argued by the Respondent that the show cause notice did not mention confiscation, thus the Commissioner could not order confiscation without prior notice. The Tribunal agreed with the Respondent, emphasizing the necessity of providing notice before confiscation as per the principles of natural justice. Since the show cause notice was issued before the insertion of Section 11AB in the Act, the Tribunal held that confiscation of assets could not be ordered, ultimately rejecting the Revenue's appeal.

Imposition of Interest under Section 11AB of the Central Excise Act:
Another issue in the appeal was the imposition of interest under Section 11AB of the Central Excise Act. The Revenue argued that interest should be levied as the duty liability was determined after the insertion of Section 11AB. Conversely, the Respondent contended that interest could not be demanded for a period before the insertion of Section 11AB. The Tribunal concurred with the Respondent, stating that interest under Section 11AB could not be demanded for a demand pertaining to a period before the provision's insertion. Since the show cause notice demanding duty was issued prior to the inclusion of Section 11AB, the Tribunal ruled that interest under Section 11AB was not applicable. Consequently, the appeal of the Revenue was dismissed.

In summary, the Appellate Tribunal CEGAT, New Delhi, in this judgment, addressed the issues of confiscation of assets under Rule 173Q(2) of the Central Excise Rules and the imposition of interest under Section 11AB of the Central Excise Act. The Tribunal ruled in favor of the Respondent, stating that assets could not be confiscated without prior notice as per natural justice principles and that interest under Section 11AB could not be imposed for a period predating its insertion into the Act.