2013 (10) TMI 1515 - AT - Central Excise

Summary

Issues involved: Confirmation of demand of duty, imposition of penalty, confirmation of interest amount, limitation period for interest demand.

Confirmation of demand of duty and imposition of penalty: Show cause notices were issued to the appellants for the period April, 1998 to September, 1999 proposing confirmation of demand of duty on the ground of use of brand name of another person. The lower authorities confirmed the demand of duty and imposed a penalty, but did not confirm any interest against the appellant in the said order. The appellant challenged these orders before higher authorities, including the Hon'ble Supreme Court, without success.

Confirmation of interest amount and limitation period: Recovery notices for confirmation of interest amount on the confirmed demands were issued in 2006 for the period of 1998-99. The Commissioner (Appeals) held that since the demand was confirmed against the appellant, interest had to be confirmed as well. However, the quantum of interest to be paid was modified. The main question in the present appeal was whether the interest demand raised in 2006 for demands from 1998-99 would be barred by limitation.

Legal Precedents: The Tribunal noted various decisions of the Hon'ble High Courts regarding the period of limitation for interest demands. The Hon'ble High Court of Punjab & Haryana and the Hon'ble High Court of Delhi had differing views on this issue. The Tribunal found that the issue was squarely covered in favor of the appellants by the recent judgment of the Hon'ble Delhi High Court, which held that the period of limitation would apply to the demand of interest. As the interest demand was made in 2006 for the period of 1998-99, the Tribunal found no justification for confirming the interest amount and set aside the impugned order, allowing the appeal with consequent relief.

Disposition of the Appeal: Despite a suggestion to transfer the matter to a Single Member Bench due to only the interest issue being involved and the quantum being less than Rs. 50 lakhs, the Tribunal decided to take up the appeal itself as the issue had been decided by the Hon'ble High Court and did not require elaborate arguments. The Division Bench proceeded to decide the appeal and disposed of it accordingly.