2010 (4) TMI 654 - AT - Central Excise

Cenvat credit - whether assessee liable to pay interest under Section 11AA or under Section 11 AB of the Central Excise Act prior to 12-5-01 - As per the provisions of Section 11AA for the period prior to 12-5-01 interest becomes payable only if the duty determined is not paid within 3 months of such determination - submissions were not made before the lower authorities interests of justice require that the impugned order be set aside and the case remitted to the adjudicating authority for fresh decision on the liability of the assessee to pay interest for the period prior to 12-5-01 after upholding their liability to interest for the period Case remitted to adjudicating authority for fresh decision

Summary

Issues: Liability of interest under Section 11AA or Section 11AB of the Central Excise Act prior to 12-5-01.

The judgment addresses the liability of the assessees to pay interest under Section 11AA or Section 11AB of the Central Excise Act for the period prior to 12-5-01. The Commissioner of Central Excise (Appeals) upheld the liability of the assessees to interest under the provisions of Rule 57AH read with Rule 57AD of Central Excise Rules, 1944, as amended by Section 82 of the Finance Act, 2005, and Rule 12 of CENVAT Credit Rules, 2001 read with Rule 6 of the CENVAT Credit Rules, 2001, as amended by Section 83 of the Finance Act, 2005, and as per the provisions of Section 11AB of the Central Excise Act, 1944. The appellants did not dispute their liability to pay interest for the period subsequent to 12-5-2001. The question was whether they were liable to pay interest under Section 11AA or Section 11AB of the Central Excise Act prior to 12-5-01. The Tribunal referred to the provisions of Section 11AA, stating that interest becomes payable only if the duty determined is not paid within 3 months of such determination. The disputed amounts were paid before the issue of show-cause notice (SCN), leading to the conclusion that no liability to interest arose for the period in question. The Tribunal relied on previous decisions in Emmellen Biotech v. CCE, Mumbai and Hari Krishna Steel Corporation v. CCE, Bhavnagar, which were upheld by the Hon'ble Gujarat High Court. The judgment emphasized the importance of legal submissions being raised at the appropriate stage and remitted the case to the adjudicating authority for a fresh decision on the liability of the assessees to pay interest for the period prior to 12-5-01, after upholding their liability to interest for the subsequent period. The appeal was allowed by way of remand, with fresh orders to be passed after providing a reasonable opportunity for the assessees to be heard in their defense. The operative portion of the order was pronounced in open court on 29-4-2010.