2008 (6) TMI 386 - AT - Central Excise

Summary

Issues involved: Appeal filed by Revenue seeking restoration of interest demand vacated in impugned order.

Summary:

1. Issue of interest liability: The appeal filed by the Revenue sought to restore the demand of interest vacated in the impugned order. The appellant had removed excisable goods without payment of duty due to unforeseen circumstances. The Commissioner (Appeals) vacated the demand of interest except for a small amount paid after the issue of Show Cause Notice. The Revenue contended that interest should be paid u/s 11AB even if duty is paid before the notice is issued.

2. Grounds raised by Revenue: The Revenue raised grounds citing case laws prior to 11-5-2001, emphasizing that interest should be paid even if duty is paid before the notice. The Respondent relied on various case laws and the judgment of the Supreme Court in a similar case, arguing that the Commissioner's order was in accordance with the law.

3. Judicial interpretation of Section 11AB: The Tribunal analyzed Section 11AB which provides for interest on delayed payment of duty. The Commissioner's reliance on case laws interpreting Section 11AB prior to 11-5-2001 was deemed misplaced. The Tribunal noted that interest liability accrues automatically, and notice is not required for its recovery. The appeal filed by the Revenue was allowed regarding the interest liability of the appellant.

Decision: The Tribunal allowed the appeal filed by the Revenue, holding that interest liability under Section 11AB accrues automatically, and notice is not required for its recovery. The case laws cited by the Commissioner (Appeals) were interpreted in light of the existing legal provisions, leading to the restoration of the interest demand vacated in the impugned order.