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2011 (3) TMI 14 - HC - Central ExciseDemand of interest on delayed payment of additional duty of excise - delay in payment - assessee contends that the interest on delayed payment charged at the rate of Rs. 1000/- per day is impermissible, in view of the notification dated 12th May, 2000 issued under Section 11AA of the Central Excise Act, 1944 - The said demand is inconsistent with the provisions of Section 11AA and also the notification dated 12th May, 2000 - amount of interest payable was ordered to be re-determined by the competent Authority so that the same conform to the maximum rate of interest, specified by the Departmental Notification No.39/2000 dated 12th May, 2000 and the provisions of Section 11AA of the Central Excise Act, 1944 Petition disposed off
Issues:
Challenge to adjudication order for interest on delayed payment of excise duty. Analysis: The petitioner's factory was registered with the Central Excise Department as a tea manufacturer, challenging the adjudication order for interest on delayed payment of additional duty of excise. The demand notice issued by the Superintendent demanded Rs. 2,17,690 for central excise duty for clearances made during a specific period. The petitioner deposited the excise duty but faced a proceeding for delayed payment interest. The petitioner argued that interest charged at Rs. 1000 per day was impermissible under a specific notification. The standing counsel for the Central Excise Department argued that the liability to pay additional excise duty was settled by a previous court decision. The petitioner was rightly charged interest for delayed payment under the Central Excise Act. The duty was deposited after the due date, triggering interest liability under Section 11AA of the Act. The rate of interest was fixed at 24% per annum by a notification dated May 12, 2000, under Section 11AA. The court found that the interest demanded at a much higher rate than specified in the notification was inconsistent with the provisions of Section 11AA and the notification itself. The court upheld the petitioner's liability to pay interest but ordered a redetermination of the interest amount to align with the maximum rate specified in the departmental notification and Section 11AA of the Central Excise Act. The writ petition was disposed of with this direction, without imposing any costs.
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