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2015 (10) TMI 1696 - AT - Central ExciseDemand of interest of confirmed duty u/s 11AA - period of limitation - Held that - Demand has been confirmed by the adjudicating authority on 8.10.98 and 4.1.2000. The demand was confirmed under Section 11A of the Central Excise Act whereas appellants paid the amount only during 2004 and 2005 that too in installments. Appellant s contention that interest cannot be demanded beyond the period of one year is not justified as on perusal of letter issued by the Range Superintendent in OC No.268/2005 dt.1.7.2005, I find that the Superintendent has only quantified the interest as per the Orders-in-Original and only requested to pay the interest. This letter cannot be construed as demand of interest. I further find that SCN No.4/98 dt.2.3.98 was issued wherein the appellants have been asked to show cause before Asst. Commissioner of Central Excise as to why Central Excise duty of ₹ 3,68,850/- should not be demanded as per Section 11A of Central Excise Act with appropriate interest as per the provisions of Section 11AA of the said Act. - Since the SCN itself raises demand of Central Excise duty under Section 11A along with interest, there is no question of any further demand of interest. The Superintendent only quantified the interest as per the adjudication order. - Decided against assessee.
Issues:
1. Demand of interest against confirmed excise duty. 2. Appeal against the demand of interest. 3. Applicability of time limit for demanding interest. 4. Interpretation of statutory provisions regarding interest under Section 11AA of the Central Excise Act. 5. Comparison of legal precedents on charging interest on confirmed demands. Analysis: 1. The case involved the demand of interest against the confirmed excise duty by the adjudicating authority through two separate orders. The Commissioner (Appeals) upheld the demand, leading the appellants to pay the excise duty but not the interest amount. Subsequently, a letter from the Range Superintendent requested payment of interest on the confirmed amount. The Tribunal initially dismissed one appeal for non-compliance and the others on merits. However, upon appeal to the High Court, the matter was remanded back to the Tribunal for a decision on merit. 2. The appellant argued that the Commissioner (Appeals) dismissed the appeal based on procedural grounds, stating that the appeal was against the Superintendent's letter, not the original orders. They contended that interest cannot be demanded beyond a one-year time limit, citing a Supreme Court decision. On the contrary, the Revenue supported the impugned orders, asserting that interest under Section 11AA is automatic upon confirmation of demand under Section 11A, referring to various case laws to support their stance. 3. The Tribunal found that the demand was confirmed under Section 11A, and the appellants only paid the amount in 2004 and 2005, well beyond the confirmation dates. The Superintendent's letter quantified interest based on the original orders but did not constitute a fresh demand. The Show Cause Notice (SCN) itself raised the demand for excise duty and interest, eliminating the need for a separate interest demand. The Tribunal differentiated the present case from the Supreme Court precedent cited by the appellant, emphasizing the specifics of the demand in the SCN. 4. Referring to a Bombay High Court judgment, the Tribunal highlighted that interest under Section 11AA is mandatory once the demand is confirmed under Section 11A. The Court's interpretation emphasized that there is no discretion to waive interest once charged, as it is a civil liability of the assessee. The Tribunal reiterated that interest on evaded duty is compulsory, irrespective of the intent behind the evasion. The Tribunal upheld the High Court's decision, dismissing all appeals based on the legal principles outlined in the judgment. 5. The Tribunal concluded by upholding the impugned orders based on the legal position established by the High Court judgment, which clarified the mandatory nature of interest under Section 11AA upon confirmation of demand under Section 11A. The Tribunal's decision aligned with the interpretation of the statutory provisions and legal precedents, leading to the dismissal of all appeals.
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