2016 (3) TMI 708 - AT - Central Excise

Recovery of interest under Section 11AA of the Central Excise Act, 1944 - Held that - In the present proceedings appellant paid the entire duty within three months after being determined by Supreme Court, as required under Section 11AA of the Central Excise Act, 1944. In view of the above observations and the settled proposition of law, order dated 24.04.2006 of the Adjudicating authority is based on a wrong premises that duty was determined against the appellant under Section 11A(2) of the Central Excise Act, 1944. In the present appeal before us neither the duty is determined under Section 11A(2) of the Central Excise act, 1944 nor appellant has given any such undertaking. Inspite of that appellant deposited the entire disputed duty decided by Supreme Court within three months from the case was decided by Apex Court. Even if it is presumed that duty was determined under Section 11A(2), which is factually incorrect, still the revised duty determined by Supreme Court stands paid within three months of such determination as per the provisions of Section 11AA(1) of the Central Excise Act, 1944, read with Explanation-I to this Section. In view of the above observations appeal filed by the appellant is required to be allowed.

Summary

Issues:
Recovery of interest under Section 11AA of the Central Excise Act, 1944 from the appellant for a demand on Pitch Creosote Mixture (PCM) paid after a partial adverse decision by the Supreme Court.

Analysis:

Issue 1: Interest Recovery under Section 11AA
The appellant argued that the demands were not made under Section 11A(2) of the Central Excise Act, 1944, and therefore, interest under Section 11AA was not applicable. The Adjudicating Authority wrongly stated that demands were confirmed under Section 11A(2). The appellant relied on the Himachal Pradesh High Court's ruling, emphasizing that interest under Section 11AA is chargeable only with respect to duty determined under Section 11A(2). The case records showed that no duty demanded against an assessee should be deemed determined under Section 11A(2). The appellant paid the entire disputed duty within three months of the Supreme Court's decision, as required under Section 11AA.

Issue 2: Case Law Comparison
The Revenue relied on the case law of CCE v. Woodcraft Products Ltd., arguing that no time limit applies to restitution of a refunded sum. However, the facts of the Woodcraft case differed significantly from the present case, where the duty was not determined under Section 11A(2), and the appellant did not give any undertaking. The appellant paid the revised duty within three months of the Supreme Court's decision, even if it were presumed to be determined under Section 11A(2).

Conclusion
The Tribunal observed that the Adjudicating authority's order was based on the incorrect premise that duty was determined under Section 11A(2). The reliance on the Woodcraft case by the Revenue was deemed inapplicable. The appellant's timely payment of the disputed duty within three months of the Supreme Court's decision aligned with the provisions of Section 11AA. Therefore, the appeal was allowed, and the recovery of interest under Section 11AA from the appellant was disallowed.

This detailed analysis of the judgment highlights the key arguments presented by both parties, the legal interpretations of relevant provisions, and the Tribunal's reasoning in allowing the appeal.