2015 (10) TMI 2283 - SC - Central Excise

Short payment of excise duty - Interest u/s 11AB - Held that - After the issuance of show cause notice, Order-in-Original was passed. However, the High Court set aside the Order-in-Original relying upon the judgment in the case of CCE, Mangalore v. Sri Krishna Pipes Industries Limited 2004 (1) TMI 82 - HIGH COURT OF KARNATAKA AT BANGALORE . - As a result, the impugned judgment of the High Court is set aside and the interest which is levied upon the respondent-assessee is maintained - Decided in favour of Revenue.

Summary

Issues:
Short payment of excise duty, imposition of interest under Section 11AB of the Central Excise Act, 1944, interpretation of Section 11A(2B) of the Act.

Analysis:
The Supreme Court dealt with a case involving the short payment of excise duty by the respondent-assessee, which was later rectified, albeit belatedly. The Revenue imposed interest under Section 11AB of the Central Excise Act, 1944, for the delayed period. The High Court had set aside the Order-in-Original, citing a previous judgment. However, the Supreme Court noted that the judgment relied upon by the High Court had been overruled in a different case. The Court examined the Order-in-Original and the plea of the assessee regarding the payment made before the issuance of the Show Cause Notice, invoking Section 11A(2B) of the Act. The Court analyzed the provision and explained that interest under Section 11AB is payable on the amount paid by the person under this sub-section and on the amount of short payment of duty, as determined by the Central Excise Office. The Court concluded that the interpretation of Section 11A(2B) was correct, overturning the High Court's decision and upholding the imposition of interest on the respondent-assessee.