2007 (4) TMI 531 - AT - Central Excise

Summary

Issues involved: Appeal against Order-in-Appeal regarding time-barred demands and issuance of show cause notice for interest and penalty after duty payment.

The Appellate Tribunal CESTAT, Bangalore heard an appeal arising from Order-in-Appeal No. 57/2005, dated 28-2-2005, where the Commissioner (Appeals) noted time-barred demands due to discrepancies noticed in September, 2002, but show cause notice issued in February, 2004 for interest and penalty. Reference was made to the Tribunal ruling in the case of Ashok Leyland Ltd. v. Commissioner of Central Excise, Chennai [2003 (156) E.L.T. 995 (Tri. - Chennai)], which held that show cause notice cannot be issued for interest and penalty if duty has been paid before the notice. The Commissioner (Appeals) found the demand confirmation unjustified and set it aside.

The learned JDR argued that the Commissioner (Appeals) erred in setting aside the entire Order-in-Original as duty had been paid earlier, suggesting only interest and penalty should have been set aside.

Upon review, the Tribunal observed the show cause notice issued on 28-2-2004 for demands from September, 2002. The Commissioner (Appeals) highlighted the Department's oversight or lack of conviction on imposing interest and penalty. It was noted that issuing a show cause notice for interest and penalty post-duty payment is unnecessary as per established law. The Tribunal found the impugned order legally sound, as the Commissioner (Appeals) correctly deemed the notice incorrect and unsustainable. The reliance on the cited judgment was deemed appropriate for the case. Consequently, the appeal was dismissed, with no merit found in upholding the Order-in-Original partially.