2010 (5) TMI 359 - AT - Central Excise

Demand of interest In respect of differential duty paid after the due date - goods were cleared on a lower assessable value and subsequently, the Appellant paid the differential duty as per the correct assessable value of the goods Held that - The provisions of Section 11AB of the Act provides - Where any duty of excise has not been levied or paid or has been short-levied or short-levied, the person who is liable to pay duty shall in addition to the duty, be liable to pay interest also. Appeal is dismissed.

Summary

Issues:
- Appeal against demand of interest for paying differential duty after the due date.
- Interpretation of provisions of Section 11AB of the Central Excise Act regarding interest on delayed payment of duty.
- Contention regarding the demand being time-barred under Section 11 of the Central Excise Act.

Analysis:
The Appellant filed an Appeal against an Order confirming the demand of interest for paying the differential duty after the due date. The Appellant, engaged in manufacturing excisable goods cleared to Railways, initially paid duty without considering the value of free-supply materials. Subsequently, the Appellant paid the differential duty after considering the value of these materials, leading to the demand of interest. The Appellant argued that the demand is time-barred as the goods were cleared in September 2006, and the show cause notice was issued in August 2008, invoking Section 11 of the Central Excise Act, 1944.

The Revenue contended that Section 11A of the Central Excise Act pertains to erroneously paid refund of Central Excise Duty, not applicable in this case. The demand in question was for interest under Section 11AB of the Act, not for duty. The Tribunal noted that Section 11AB provides for interest on delayed payment of duty. In this case, the goods were initially cleared at a lower assessable value, and the Appellant paid the differential duty later based on the correct assessable value. The provision states that in cases of short-levied duty, the person liable to pay duty is also liable to pay interest. Since the Appellant did pay the differential duty after clearance of goods, the Tribunal found no fault in the demand of interest as per the impugned Order. Consequently, the Appeal was dismissed.

In conclusion, the Tribunal upheld the demand of interest under Section 11AB of the Central Excise Act, ruling that the Appellant's payment of differential duty after the due date warranted the imposition of interest. The contention of the Appellant regarding the demand being time-barred under Section 11 of the Act was rejected, emphasizing the applicability of Section 11AB for cases of delayed payment of duty.