2004 (3) TMI 305 - AT - Central Excise

Summary

Issues:
1. Applicability of interest levy provisions pre and post amendment of Sec. 11AB.
2. Interpretation of "duty became payable" under Sec. 11AB.
3. Comparison with previous tribunal orders on interest levy.

Analysis:
1. The case involved the appellants taking excess Modvat credit, which they later reversed upon detection of the error. A show cause notice was issued proposing confirmation of the credit reversal, interest levy, and penalty imposition. The Assistant Commissioner levied interest but dropped the penalty proposal. The Commissioner (Appeals) upheld the interest levy, leading to the appeal before the Tribunal.

2. The Tribunal considered the date on which duty became payable crucial in determining the applicability of interest levy provisions. The appellants argued that since duty became payable on 5-4-2001, before the amendment of Sec. 11AB on 11-5-2001, interest could not be levied without fraud/collusion/suppression of facts. The Departmental Representative contended that duty remained payable until it was actually paid in October 2001, post the amendment allowing interest levy without the mentioned ingredients.

3. The Tribunal analyzed the phrase "duty became payable" in Sec. 11AB, emphasizing that the actual payment date is irrelevant for interest levy determination. Referring to previous tribunal orders like Modern Insulators v. CCE, Jaipur and Man Structural Ltd. v. CCE, Jaipur, the Tribunal ruled that interest under Sec. 11AB is not chargeable for periods before 11-5-2001 without fraud/collusion/suppression of facts. As the duty in this case became payable before the amendment, interest levy was deemed inapplicable. The Tribunal set aside the interest levy, citing consistency with prior judgments and the specific circumstances of the case.