2010 (1) TMI 1033 - AT - Central Excise

Summary

Issues:
- Appeal against Order-in-Appeal No. 19/4/2004-Central Excise
- Direction by Hon'ble High Court to consider demand of interest for delayed period
- Question of imposition of penalty raised by Revenue
- Interpretation of provisions of Section 11AB
- Challenge on the imposition of penalty by Revenue before Hon'ble High Court
- Consideration of demand of interest for the period September 1999 to December 2001

The judgment pertains to an appeal filed against Order-in-Appeal No. 19/4/2004-Central Excise. The Hon'ble High Court directed the Tribunal to consider the demand of interest for a delayed period. The Revenue raised concerns about the imposition of penalties, arguing that the appellant should pay penalty and interest. The key issue revolved around the interpretation of Section 11AB concerning the demand of interest. The Revenue challenged the Tribunal's decision on penalties before the Hon'ble High Court. The Tribunal, in its earlier order, had set aside the penalties imposed on the appellant. The Hon'ble High Court's judgment highlighted that the demand was not sustainable, leading to the question of interest payment. The Tribunal found that since the impugned order was set aside on merits with no sustainable demand, the appellant was not liable to pay interest. Consequently, the impugned order was set aside, and the appeal was allowed on 18-1-2010.

In the case, the Hon'ble High Court directed the Tribunal to consider the demand of interest for the delayed period. The appellant argued that Section 11AB provisions were not applicable before 11-5-2001 unless there was suppression of fact, misstatement, fraud, or collusion. The Revenue contended that penalties should also be imposed, raising the question before the Hon'ble High Court. The Tribunal found that the impugned order was set aside on merits, and the demand was not sustainable. Since there was no appeal against this decision, the Tribunal concluded that the appellant was not liable to pay interest. Therefore, the impugned order was set aside, and the appeal was allowed on 18-1-2010.

The central issue in the judgment was the demand of interest for the period September 1999 to December 2001 as directed by the Hon'ble High Court. The Tribunal emphasized that the Revenue did not challenge the earlier order on its merits, which had set aside the demand as not sustainable. As a result, the Tribunal held that there was no basis for the appellant to pay interest. The impugned order was overturned, and the appeal was granted on 18-1-2010, based on the lack of a sustainable demand for interest.