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2018 (2) TMI 1174 - AT - Central ExciseInterest on delayed payment of duty - whether the appellant is liable for payment of interest on delayed payment of nine days from 06.09.2013 to 14.09.2013 on ₹ 5,02,36,000/-? - Held that - issue is no more res-integra in view of the decision of the Tribunal in the case of Trimurti Fragrances Pvt. Ltd. Vs. Commissioner of Central Excise, Delhi 2016 (2) TMI 718 - CESTAT NEW DELHI , where it was held that the third proviso to Rule 9, the duty was payable by the 5th of August, 2013. Duty was in fact paid on 27th July, 2013. There is therefore no delayed payment of duty warranting levy of interest under Section 11AA of the Act. The appellant failed to pay the duty on the due date i.e. 05.09.2013 and paid a part of the duty only on proportionate basis for running of the machine for the remaining days w.e.f. 16.09.2013 on 14.09.2013 - the Tribunal observed that failure to pay monthly duty by 5th day of the same month under Rule 9 of the Rules would not invite liability of interest as in the case of claim of abatement as the duty was paid in the same month. The demand of interest is set aside - appeal allowed - decided in favor of appellant.
Issues:
1. Liability for payment of interest on delayed duty payment. Analysis: The case involved a manufacturer of Pan Masala who filed a claim for abatement of duty under Rule 10 of the Pan Masala Packing Machine Rules, 2008. The Adjudicating Authority sanctioned the abatement but demanded interest on delayed duty payment. The main issue was whether the appellant was liable for interest on delayed payment amounting to a specific sum. The Tribunal referred to previous judgments to analyze the issue. In the case of Trimurti Fragrances Pvt. Ltd. vs. Commissioner of Central Excise, Delhi, it was discussed that the duty payable for a month should be calculated based on the number of operating packing machines in the factory. The rules specify the obligations of manufacturers regarding the installation and operation of packing machines. The Tribunal concluded that failure to pay monthly duty by the 5th day of the same month would not attract interest liability if the duty was paid within the same month. Furthermore, the Tribunal cited the case of Jaiswal Products vs. Commissioner of Central Excise, Delhi-II, where it was argued that duty liability must be discharged on the 5th day of the month, but due to factory closure, the duty was paid upon resumption of production activities. The third proviso of Rule 9 was highlighted, indicating that duty for a particular month is payable on the 5th day of the following month, thereby negating any delay in payment of duty. In the present case, the appellant paid the total duty amount for September 2013 but failed to pay on the due date. The Tribunal noted that the duty was paid in the same month, and as per the rules, failure to pay monthly duty by the 5th day of the same month does not attract interest liability. Consequently, the demand for interest was set aside, and the appeal was allowed. In conclusion, the judgment clarified the liability for interest on delayed duty payment, emphasizing the importance of timely compliance with duty payment deadlines as per the relevant rules and provisions.
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