2004 (2) TMI 423 - AT - Central Excise

Summary

Issues:
Demand of interest under Section 11AA of the Central Excise Act, 1944 for a specific period; Contention regarding provisional approval of classification list and duty demand determination under Section 11A; Applicability of interest payment on delayed duty payment; Finality of order confirming duty demand; Challenge of order under Section 11A; Interpretation of law regarding provisional assessments and interest payment.

Analysis:
The appellants contested the demand of interest under Section 11AA of the Central Excise Act, 1944, for the period from 26-8-1995, citing the period of duty demand from May 1990 to November 1990. They argued that interest cannot be charged before finalization of provisional assessment, referring to various case laws. The appellants emphasized that the confirmation of demand in October 1993 should be considered as finalizing the provisional assessment, thus exempting them from interest payment.

The department, represented by the learned JDR, asserted that the duty demand confirmation was under Section 11 of the Act, which was upheld in appeals, making it final. They contended that interest is payable since the duty amount remained unpaid until 22-7-1998. The department highlighted that the provisional assessment argument was raised for the first time before the Tribunal.

The Tribunal analyzed the case records and case laws cited. It noted that the appellants did not raise the provisional assessment issue earlier. The Tribunal observed that the order confirming the demand in 1993 was subsequent to finalization of classification and quantifying the short paid amount. The Tribunal clarified that an order under Section 11A can address situations from provisional assessments and still be considered under Section 11A, enabling interest payment under Section 11AA. The Tribunal emphasized that the order under Section 11A was challenged but upheld, attaining finality. Therefore, the Tribunal concluded that interest is payable from 26-8-1995 to 22-7-1998, as the duty amount was paid by the appellants on the latter date, ultimately rejecting the appeal.