2012 (8) TMI 832 - AT - Central Excise

Waiver of pre-deposit of interest demanded on differential duty paid - Held that - Even though the demand pertains to the year 2007-08, but the differential duty has been paid by the applicant only in January 2009, therefore cause of action arose in January 2009 only and demand of interest by way of show-cause notice has been made within one year from January 2009. Therefore the case laws cited by the learned consultant are not relevant to the facts of this case. In view of these observations, the applicants have not made out a case for 100% waiver of pre-deposit - Decided against assessee.

Summary

Issues:
- Whether waiver of pre-deposit of interest demanded on differential duty paid through supplementary invoices is justified.

Analysis:
1. The applicant sought waiver of pre-deposit of interest demanded on the duty paid through supplementary invoices following an audit for the period 2007-08. The Department pointed out non-payment of duty as per CAS-4, leading to the issuance of supplementary invoices by the applicant in January 2009. Subsequently, a show-cause notice was issued in July 2009 for interest on the duty paid through these invoices.

2. The applicant's consultant argued that the demand for interest was time-barred, citing decisions of the Hon'ble Supreme Court in various cases. The consultant requested a stay on the interest demand for the period 2007-08 due to limitation issues.

3. In contrast, the learned AR contended that the issue was covered by the Hon'ble Supreme Court's decision in the case of Commissioner v. SKF India Ltd., which was followed in another case. The AR argued that the demand for interest was valid based on these precedents.

4. After considering both parties' submissions, the Tribunal noted that although the demand related to the year 2007-08, the differential duty was paid by the applicant in January 2009, causing the cause of action to arise at that time. As the show-cause notice for interest was issued within one year from January 2009, the Tribunal found the case laws cited by the consultant irrelevant. Consequently, the Tribunal ruled that the applicant did not establish grounds for a 100% waiver of pre-deposit. The applicants were directed to pre-deposit the entire interest amount within eight weeks and report compliance by a specified date.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's decision regarding the waiver of pre-deposit of interest demanded on the duty paid through supplementary invoices.