2009 (4) TMI 641 - AT - Central Excise

Summary

Issues:
1. Liability of interest under Section 11AB of the Central Excise Act, 1954 for delayed payment of duty.
2. Applicability of Section 11AB in cases of payment of differential duty by the assessee.
3. Interpretation of Sections 11A and 11AB in relation to duty payment and interest liability.

Analysis:
1. The case involved the appellant clearing finished products to their sister concern at a provisional price, later realizing a short payment of duty which was rectified by paying the differential amount. The authorities demanded interest under Section 11AB for the delay in payment. The Tribunal upheld the interest demand, stating that the interest liability arose due to the delay in paying the dues to the Department, not due to price revision by the buyer. The interest was deemed payable even if duty was paid based on the assessee's own ascertainment.

2. The appellant argued that Section 11AB was not applicable since there was no notice under Section 11A and no determination of short-levy or short-payment of duty. They contended that interest was not due as the duty was paid voluntarily based on their own assessment. However, the Tribunal clarified that even in cases of short-paid duty rectified by the assessee, interest under Section 11AB is applicable, as per the clear legal provisions.

3. The Tribunal analyzed the provisions of Sections 11A and 11AB of the Act. It highlighted that interest under Section 11AB is payable not only on the amount paid by the person under his own ascertainment but also on any short-payment of duty determined by the Central Excise Officer. The judgment emphasized that the interest liability arises from the delay in paying the duty owed to the Department, irrespective of the method of duty ascertainment by the assessee.

In conclusion, the Tribunal rejected the appeal, upholding the demand for interest under Section 11AB. It clarified that the interest liability was valid, considering the delay in payment of duty owed to the Department, and distinguished the case from precedents cited by the appellant. The judgment underscored the strict application of the legal provisions regarding duty payment and interest liability, affirming the decision of the authorities in demanding interest for the delayed payment of duty.