2008 (1) TMI 279 - AT - Central Excise

Rectification of mistake application by revenue - Levy of interest under the provisions of Section 11AB for delay in payment of duty - provisions of Section 11AB that existed prior to 11-5-2001, not provides for recovery of interest on delayed payment - interest on delayed payment of duty would not be applicable to cases prior to the enactment of Finance Bill, 2001 - there is no merit in the application so it is accordingly dismissed

Summary

Issues involved:
1. Levy of interest under Section 11AB of the Central Excise Act and Rule 57-I(5) of the Central Excise Rules, 1944.
2. Validity of action taken under Section 38A of the Central Excise Act, 1944 read with Section 132 of the Finance Act, 2001.
3. Interpretation of the proviso in Section 11AB regarding the applicability of interest on delayed payment of duty.

Analysis:
Issue 1:
The judgment addressed the issue of the levy of interest under Section 11AB of the Central Excise Act and Rule 57-I(5) of the Central Excise Rules, 1944. The Revenue contended that interest could be recovered based on the provisions of Section 11AB, citing differences between the old and new provisions. However, the Tribunal found that the intention of the Government was to make Section 11AB inapplicable to the period before its substitution in 2001. The Tribunal referred to a previous case to support this interpretation, emphasizing that the proviso in Section 11AB clearly indicated that the provisions would not apply to the period before 2001. Therefore, the Tribunal ruled in favor of the appellant, setting aside the demand for interest under Section 11AB.

Issue 2:
Regarding the validity of action taken under Section 38A of the Central Excise Act, 1944 read with Section 132 of the Finance Act, 2001, the Tribunal dismissed the Revenue's reliance on these provisions. The Tribunal referred to a previous case to support its decision, stating that the intention of the Government expressed in Section 11AB of the Central Excise Act was to make it inapplicable to the period before 2001. Therefore, the Tribunal found the Revenue's reliance on Section 38A misplaced and ruled in favor of the appellant.

Issue 3:
The judgment also analyzed the interpretation of the proviso in Section 11AB regarding the applicability of interest on delayed payment of duty. The Tribunal carefully examined the proviso and the General Clause Act to determine the legislative intent behind the provision. It concluded that there was a clear intention to exclude the application of interest on delayed payment of duty to cases prior to the enactment of the Finance Bill, 2001. Therefore, the Tribunal allowed the appeal by setting aside the demand for interest, as the old Section 11AB was not saved by the General Clause Act.

In conclusion, the Tribunal's judgment provided a detailed analysis of the issues related to the levy of interest under Section 11AB and Rule 57-I(5), the validity of action under Section 38A, and the interpretation of the proviso in Section 11AB. The decision was based on legal interpretations and previous case law, ultimately ruling in favor of the appellant and dismissing the Revenue's contentions.