2009 (7) TMI 1039 - AT - Central Excise

Summary

Issues involved: Determination of liability to pay interest under Section 11AB of the Central Excise Act on duty paid by the respondent for the period February 2003 to October 2004.

In this case, the Appellate Tribunal CESTAT MUMBAI considered whether the respondent is liable to pay interest under Section 11AB of the Central Excise Act on the duty paid by them for the period February 2003 to October 2004. The learned Commissioner (Appeals) had granted the benefit of sub-section (2B) of Section 11A to the assessee as they correctly paid the duty before the show-cause notice was issued. The appellant challenged the waiver of interest under Section 11AB. The learned SDR argued that the waiver of interest was contrary to the provisions of the Act, specifically referring to the Explanation to sub-section (2B) of Section 11A. The Tribunal found merit in the SDR's submission, noting that the liability of interest under Section 11AB is explicit in the text of the Act. The Tribunal held that the waiver of interest by the Commissioner (Appeals) was illegal and set it aside, directing the assessee to pay the interest calculated in accordance with the law. Therefore, the appeal was allowed in favor of the Department.

The key issue in this judgment was the interpretation of the provisions of Section 11AB of the Central Excise Act regarding the liability of the respondent to pay interest on the duty paid for a specific period. The Tribunal examined the facts of the case and the arguments presented by the Department to determine whether the waiver of interest by the Commissioner (Appeals) was justified. The Tribunal found that the waiver of interest on the duty paid by the assessee was illegal as it was contrary to the explicit provisions of the Act. Consequently, the impugned order was modified to remove the waiver of interest, and the assessee was directed to pay the calculated interest amount. This decision highlights the importance of adhering to the statutory provisions when determining the liability for interest under the Central Excise Act.

In conclusion, the Appellate Tribunal CESTAT MUMBAI ruled in favor of the Department in an appeal concerning the liability of the respondent to pay interest under Section 11AB of the Central Excise Act. The Tribunal found that the waiver of interest granted by the Commissioner (Appeals) was illegal as it contradicted the provisions of the Act. Therefore, the Tribunal set aside the waiver of interest and directed the assessee to pay the interest amount in accordance with the law. This judgment underscores the significance of adhering to statutory provisions when determining financial liabilities in excise matters.