2018 (5) TMI 282 - AT - Central Excise

Demand of interest - Section 11AB of the Central Excise Act, 1944 - time limitation - Held that - there is no allegation of suppression of facts and the show-cause notice was issued after a period of 4 years, therefore, the interest should be limited to the normal period of limitation without invoking the extended period - appeal allowed in part.

Summary

Issues:
- Appeal against Order-in-Original for recovery of interest under Section 11AB of the Central Excise Act, 1944.
- Applicability of extended period of limitation for demanding interest.
- Interpretation of relevant case laws regarding recovery of interest.

Analysis:

Issue 1: Appeal against Order-in-Original for recovery of interest under Section 11AB
The appellant, a Public Sector Undertaking, filed an appeal against Order-in-Original No. 16/Demand/C.Ex/Commr./BRC-I/2013 dated 28.2.2013 passed by the Commissioner of Central Excise & Customs, Vadodara. The appellant had paid a differential duty of &8377; 49,27,92,042/- during the period from April 2006 to December 2010 but did not pay interest under Section 11AB of the Central Excise Act, 1944. A show-cause notice was issued for recovery of interest amounting to &8377; 3,62,68,606/-. The appellant contended that the demand for interest was not sustainable in law as the amounts were voluntarily paid during the relevant period.

Issue 2: Applicability of extended period of limitation
The appellant argued that the show-cause notice demanding interest was issued invoking the extended period of limitation, which was not justified. The appellant cited the judgment of the Hon'ble High Court of Delhi in Hindustan Insecticides Ltd. vs. Commissioner of Central Excise, where it was held that there was no suppression or mis-declaration. The Revenue, however, relied on the judgment of the Hon'ble Allahabad High Court in APL Appolo Tubes Ltd. vs. Dy. Commissioner, Commercial Tax to support the contention that no separate show-cause notice was required for the recovery of interest.

Issue 3: Interpretation of relevant case laws regarding recovery of interest
The Tribunal referred to the judgment of the Hon'ble High Court of Delhi in the case of Hindustan Insecticides Ltd., where it was observed that the payment of interest under Section 11A of the Central Excise Act, 1944 should be subject to the period of limitation prescribed. The Tribunal noted that in the present case, there was no allegation of suppression of facts, and the show-cause notice was issued after a period of 4 years. Therefore, the interest should be limited to the normal period of limitation without invoking the extended period. The Tribunal disposed of the appeal in favor of the appellant based on the interpretation of relevant case laws.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the Tribunal's interpretation of relevant legal principles and case laws in arriving at its decision.