2015 (9) TMI 770 - AT - Central Excise

Duty demand - Concessional rate of duty - Demand of interest u/s 11AA - Held that - During the reading of the said provisions, interest is payable after three months from the date of final determination of duty payable by the assessee. Admittedly in this case duty has been paid by the appellant before their actual determination by the Adjudicating Authority as directed by the Tribunal in remand proceedings. Therefore, relying on the decision of AEON S CONSTRUCTION PRODUCTS LTD. VS. CCE, CHENNAI reported in 2007 (5) TMI 404 - CESTAT, CHENNAI , we hold that appellant are not required to pay interest for the intervening period from the date of initial assessment of duty till the re-quantification of the duty in the remand proceedings. Therefore, we set aside the impugned order - Decided in favour of assessee.

Summary

Issues:
- Confirmation of demand and interest against the appellant during the intervened period.
- Interpretation of Section 11AA of the Central Excise Act, 1944 regarding payment of interest on delayed duty.

Analysis:
1. The appellant appealed against an order confirming demand and interest during the intervened period when their duty liability was re-quantified. They manufactured furnace oil and HPS under Chapter 10 Procedure without payment of duty/concessional rate of duty. Initially, duty demand was confirmed for specific periods, and the appellant challenged these orders before the Tribunal.

2. The Tribunal, relying on a previous decision, held that the appellant was required to pay duty but sent the matter back to the Adjudicating Authority for re-quantification as per Section 11A(2) of the Central Excise Act, 1944. The duties were re-quantified in the remand proceedings, and the appellant had already paid the re-quantified duty. The Revenue contended that interest was payable on the duty from the initial orders till the actual payment under Section 11AA of the Act.

3. The Tribunal analyzed Section 11AA, which mandates interest on delayed duty payment. It noted that interest is payable after three months from the final determination of duty. Since the duty was paid before the final determination by the Adjudicating Authority as directed by the Tribunal, the appellant was not required to pay interest for the intervening period. Citing a relevant case law, the Tribunal held that interest was not applicable from the initial assessment of duty till the re-quantification in the remand proceedings.

4. Consequently, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief if any. This decision clarified the interpretation of Section 11AA and established that interest on delayed payment of duty is not applicable when duty has been paid before the final determination by the Adjudicating Authority, as directed by the Tribunal in remand proceedings.