2003 (10) TMI 180 - AT - Central Excise

Summary

Issues: Liability to pay duty, imposition of penalty, demand of interest under Section 11AB

Liability to pay duty:
The appellant, a texturiser of yarn, was required to pay back a specific amount of credit taken by them under Rule 57AG(3)(a) due to the substitution of ad valorem duty with a specific rate of duty. The appellant paid only a portion of the amount, leading to the issuance of notices demanding the unpaid duty under Section 11A. The Assistant Commissioner adjudicated the matter, demanding the duty, imposing a penalty, and interest. The appellant's appeal to the Commissioner (Appeals) was dismissed, leading to the appeal before the Tribunal. The representative's argument of financial hardship was deemed irrelevant to the liability to duty, which was not disputed. The Tribunal dismissed the appeal concerning the liability as it was not questioned.

Imposition of penalty and demand of interest under Section 11AB:
The Tribunal found no justification for the imposition of penalty or the demand for interest under Section 11AB. The credit was rightfully taken initially, and the liability to pay the amount arose due to subsequent changes in the rules. The liability did not result from any acts or omissions by the appellant that contravened the law. The Tribunal noted the absence of any provision in the law for a penalty for late or non-payment of duty in this scenario. Section 11AB, which applies to liabilities arising from specific circumstances like suppression, did not apply in this case. The penalty imposed and the demand for interest were set aside. The Tribunal refrained from addressing the recovery of interest on duty under other provisions of the law, leaving it to the department to proceed accordingly.

Judgment:
The Tribunal allowed the appeal in part, dismissing the appeal regarding the liability to pay duty while setting aside the penalty imposed and the demand for interest under Section 11AB. The decision emphasized that the liability to duty did not arise from any wrongful acts or omissions by the appellant, leading to the dismissal of the penalty and interest demands.