2007 (4) TMI 421 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand for rebate amount fraudulently claimed by the assessee.
2. Imposition of penalty under Sec. 11AC of the Central Excise Act, 1944.
3. Levying of interest under Sec. 11AB of Central Excise Act, 1944.
4. Interpretation of provisions prevailing at the time of initiation of proceedings.

Analysis:
1. The Additional Commissioner confirmed the demand of Rs. 52,305, related to a rebate amount fraudulently claimed by the assessee. An order for appropriation of Rs. 45,000, already deposited by the assessee, was also in place. Additionally, a penalty of Rs. 20,000 was imposed under Sec. 11AC of the Central Excise Act, 1944, along with interest on the duty payable for clearance from October 1996 to April 1997 under Sec. 11AB of the Act. The Commissioner (Appeals) set aside the interest amount, citing the enactment date of Sec. 11AB as after the disputed period, hence not applicable.

2. The revenue contended that as per the decision in a previous case, provisions prevailing at the time of initiation of proceedings should apply. The revenue argued that since the show cause notice was issued after the introduction of Sec. 11AB, interest should be chargeable. However, the tribunal disagreed, stating that the disputed period predated the introduction of Sec. 11AB. Merely issuing the notice after the provision's introduction does not validate interest recovery when the provision was not in force during the disputed period. The tribunal upheld the right to enforce provisions not only at the initiation of proceedings but also covering the period under dispute, ultimately rejecting the revenue's appeal for lacking merit.

In conclusion, the appellate tribunal dismissed the revenue's appeal, emphasizing that the interest amount could not be legally recovered as the disputed period preceded the introduction of Sec. 11AB of the Central Excise Act. The tribunal upheld the right of the party to enforce provisions not only at the initiation of proceedings but also covering the period under dispute, ultimately determining that the revenue's appeal lacked merit and was rejected.