2007 (1) TMI 409 - AT - Central Excise

Summary

Issues Involved:
Whether the appellants are liable to pay interest on the differential duty short paid due to under-valuation of goods from July 2000 to March 2003.

Analysis:
The judgment in question revolves around the issue of whether the appellants are obligated to pay interest on the differential duty short paid by them. The appellants contested the imposition of interest, arguing that the duty was paid before the issuance of the show cause notice, citing the decision in the case of Commissioner of Central Excise v. Machino Montell. However, the tribunal examined the amended provision to Section 11AB, which mandates the payment of interest in cases where duty is not paid or short paid, or when the assessee pays duty before the service of a notice. The tribunal highlighted sub-section 2B of Section 11A, which states that if the assessee pays the duty before receiving a notice and informs the Central Excise officer, no notice shall be served. Consequently, the tribunal concluded that even if duty is paid before a show cause notice is issued, the liability to pay interest arises under Section 11AB. The tribunal also noted that the decision in Machino Montell was overturned by the Honorable Punjab & Haryana High Court, further weakening the appellant's argument.

Moreover, the tribunal emphasized that the Larger Bench decision in Machino Montell did not support the appellant's position, as it was reversed by the Punjab & Haryana High Court. Therefore, the tribunal found no merit in the appeal and proceeded to reject it. The judgment was pronounced in court on 24th January 2007. This detailed analysis elucidates the tribunal's reasoning and application of relevant legal provisions to resolve the issue at hand regarding the liability of the appellants to pay interest on the differential duty short paid.