2017 (3) TMI 1408 - AT - Central Excise

Interest - payment of appropriate interest on the outstanding amount of duty for the month June 1998 in terms of Clause (i) of the Third Proviso to Sub-Rule (3) of Rule 96ZO of the CER, 1944 - Held that - similar issue decided in the case of M/s. Shree Bhagwati Steel Rolling Mills Versus Commissioner of Central Excise & Another 2015 (11) TMI 1172 - SUPREME COURT , where it was held that since Section 3A which provides for a separate scheme for availing facilities under a compound levy scheme does not itself provide for the levying of interest, Rules 96ZO, 96ZP and 96ZQ cannot do so - demand set aside - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against Order-in-Appeal seeking penalty equivalent to duty and interest on outstanding amount of duty.
2. Appeal by assessee against order concerning payment of interest.

Analysis:
1. The Revenue appealed against the Order-in-Appeal seeking imposition of penalty equivalent to duty and interest on outstanding duty for June 1998. The First Appellate Authority had rejected the Revenue's appeal based on the Third Proviso to Sub-Rule (3) of Rule 96ZO of the Central Excise Rules, 1944. The appellant assessee also appealed against the order specifically regarding the payment of interest.

2. The consultant for the party presented a copy of the Supreme Court's decision in a relevant case, highlighting the importance of substantive provisions for levying interest on delayed tax payments. Referring to previous judgments, it was emphasized that interest can only be charged if the statute explicitly provides for it. The absence of such provisions in the compound levy scheme under Section 3A indicated that Rules 96ZO, 96ZP, and 96ZQ could not levy interest. Citing precedents, it was established that the compound levy scheme operates independently with its own provisions for payment, interest, and penalties, excluding general provisions from the Act and Rules.

3. In line with the Supreme Court's decisions and the principles outlined in previous cases, the Tribunal rejected the Revenue's appeals and allowed the appeal filed by the assessee. The judgment emphasized the self-contained nature of the compound levy scheme and the exclusivity of its provisions regarding payment, interest, and penalties. By following the legal precedents and the specific provisions of the compound levy scheme, the Tribunal upheld the appellant assessee's appeal and disposed of the cross objection as well.