2003 (12) TMI 367 - AT - Central Excise

Summary

Issues Involved:
- Demand of interest under Section 11AA of the Central Excise Act from M/s. Venus Industries.

Analysis:

Issue 1: Demand of interest under Section 11AA
The appeal filed by the Revenue raised the issue of whether interest is demandable from M/s. Venus Industries under Section 11AA of the Central Excise Act. The Revenue contended that interest on delayed payment of duty is recoverable from the defaulter as per the provisions of Section 11AA. The Deputy Commissioner directed the respondents to pay interest, but the Commissioner (Appeals) allowed the appeal against the demand of interest, stating that it was not explicitly mentioned in the show cause notice and the demand pertained to a period before Section 11AA came into effect. The Revenue argued that interest liability does not need to be explicitly mentioned in the notice, and reliance was placed on a tribunal decision to support the claim for interest payment.

Issue 2: Interpretation of Sections 11AA and 11AB
The Advocate for the Respondent argued that the demand of Central Excise duty against the respondents was confirmed using the extended period of limitation under Section 11AB, and thus interest under Section 11AA cannot be demanded. It was contended that the provisions of Section 11AA are subject to Section 11AB, and interest under Section 11AA is applicable only for normal cases of duty determination. The Advocate also cited a tribunal decision and a Ministry circular to support the argument that interest under Section 11AA can only be demanded for clearances after its insertion in the Act.

Judgment:
The Tribunal analyzed the provisions of Section 11AA and Section 11AB of the Central Excise Act. It held that interest under Section 11AA is payable if a person fails to pay the duty determined within three months from the date of such determination under Section 11A(2) of the Act. The Tribunal concluded that the respondents are liable to pay interest under Section 11AA as they did not pay the duty within three months of its determination. However, it noted that the duty was finally determined by the Commissioner on a later date, and the entire payment was made by the respondents by a specified date. Therefore, the Tribunal ruled that interest under Section 11AA would be payable by the respondents for the period after three months from the date of determination of duty until the final payment date.

In conclusion, the appeal was disposed of by ordering M/s. Venus Industries to pay interest under Section 11AA of the Central Excise Act for the specified period.