2006 (3) TMI 636 - AT - Central Excise

Summary

Issues:
- Appeal against Order-in-Appeal No. 116/2004 CE dated 20-5-2004
- Allegations of evading Central Excise duty by collecting additional charges
- Confirmation of duty demand by Additional Commissioner
- Appeal by both parties against the Additional Commissioner's order
- Remand by Commissioner (Appeals) for re-quantification of duty
- Imposition of penalties under various sections on the appellants
- Appeal against Order-in-Appeal before CEGAT, Bangalore
- Remand by CEGAT for a de novo order by the Original authority
- Confirmation of duty demand and penalties in the de novo order
- Appeal against the de novo order before the Commissioner (Appeals)
- Reduction of penalty in the impugned order by Commissioner (Appeals)
- Challenge against the imposition of interest under Section 11AB

Analysis:
The appeal was filed against Order-in-Appeal No. 116/2004 CE dated 20-5-2004, where the appellant, a Small Scale Industry unit manufacturing Industrial and Medical Oxygen, was accused of evading Central Excise duty by collecting additional charges. The Additional Commissioner confirmed the duty demand, leading to appeals by both parties. The Commissioner (Appeals) remanded the case for re-quantifying the duty and imposed penalties under Section 11AC, Rule 209A, and Rule 210. The case was further remanded by CEGAT for a de novo order, resulting in the confirmation of duty demand and penalties. The Commissioner (Appeals) reduced one penalty but upheld the rest, prompting a challenge by the appellants.

The main contention in the appeal was the imposition of interest under Section 11AB. The appellant argued that interest should not be imposed as per the provisions of Section 11AB, which were not applicable to cases before the enactment of the Finance Bill 2001. The Commissioner (Appeals) justified the interest imposition based on the General Clauses Act, stating that interest could be demanded under the repealed Section 11AB until 10-5-2001. However, the Tribunal disagreed, citing the proviso in Section 11AB and Section 6A of the General Clauses Act. The Tribunal held that the intention was clear that interest would not apply to cases before 2001, thus setting aside the demand for interest. The penalty was upheld as there was no substantial challenge to it.