2009 (3) TMI 491 - HC - Central Excise

Recovery- The dispute raised by the petitioner essentially relates to two aspects. Firstly, it is contended by the petitioner that all the aforementioned demands relate to a period prior to 1995 and therefore interest cannot be levied under Sections 11AA and 11AB of the Central Excise Act, because the said Sections were brought into force only with effect from 26-5-1995 and 28-9-1996 respectively. Held that- in absence of any material to show that an amount of Rs. 3,06,445/- emanate from a demand confirmed under Section 11A. it is not open to department to recover the same.

Summary

Issues:
1. Classification of excisable items and default in payment of excise duty.
2. Levying interest on outstanding amounts under Sections 11AA and 11AB of the Central Excise Act.
3. Dispute regarding a specific amount not covered by a final demand under Section 11A of the Central Excise Act.

Analysis:
1. The judgment addresses the classification of excisable items and default in payment of excise duty by a petitioner whose industrial unit was engaged in fabrication and galvanization of M.S angles for electric towers. The demands for excise duty under Exhibits P11, P13, and P18 were confirmed, with the petitioner having no serious dispute regarding Exhibit P13. The petitioner's argument that the job did not amount to manufacture under the Central Excise Act was not accepted, and it was established that the demands under Exhibits P11 and P18 had been finalized through appeals and orders by the relevant authorities.

2. The issue of levying interest on outstanding amounts under Sections 11AA and 11AB of the Central Excise Act was raised by the petitioner. The judgment clarified that interest could be levied on amounts outstanding as of specific dates, even if the demands related to periods prior to the enactment of these sections. The learned counsel for the respondents' submission regarding the levy of interest from the dates when the amounts remained outstanding was upheld by the court.

3. Another dispute involved a specific amount of Rs.3,06,445, which the petitioner argued was not covered by a final demand under Section 11A of the Central Excise Act. The court noted that there was no evidence in the counter-affidavit to prove that this amount was the subject of a written demand issued by a competent authority under Section 11A. Consequently, the court held that in the absence of such evidence, the respondents could not recover this amount from the assessee.

In conclusion, the judgment disposed of the writ petition by upholding the validity of demands made under Exhibits P11, P13, and P18, allowing the respondents to pursue recovery steps. It also left open the petitioner's option to seek a reduction or waiver of interest from the competent authority in accordance with the law. The court directed that if the authority granted a remission of interest, the petitioner's liability would be limited accordingly.