2007 (4) TMI 266 - HC - Central Excise

Summary

Issues involved: The judgment involves the State's appeal against the Tribunal's order regarding duty exemption on Synthetic Adhesives, imposition of penalty under Section 11C of the Act, and levy of interest under Sections 11AC and 11AB of the Central Excise Act.

Imposition of Penalty: The Tribunal granted immunity from penalty to the assessee as duty was paid before the show cause notice, citing previous judgments. The State argued that penalty should be imposed despite early duty payment, as the Department's actions prompted the payment. However, the Court upheld the Tribunal's decision based on precedents where penalty was not justified when duty was paid before the notice.

Levy of Interest: The Court remanded the matter of interest payment back to the Tribunal, as duty was paid after a demand but before the show cause notice. While interest seemed applicable prima facie, previous judgments did not discuss interest in similar cases. The Court directed the Tribunal to consider the interest issue further.

Conclusion: The Court partly accepted the appeal, ruling against the revenue on penalty but leaving the decision on interest pending. The matter was sent back to the Tribunal for a detailed consideration of interest for the delayed period, with a deadline for completion of proceedings.