2014 (3) TMI 743 - AT - Central Excise

Waiver of pre deposit - Payment of differential duty - Held that - Appellants have been paying the differential duty from time to time and showing the details thereof in the returns filed by them and therefore extended period could not have been invoked. When the extended period could not have been invoked for recovery of the demand, the question of demanding interest also does not arise - wherein a view was taken that for demanding interest also limitation under Section 11A will be applicable and therefore, if the suppression, fraud, mis-declaration, etc., are not proved, interest also cannot be demanded - appellant has made out a prima facie case for stay - Stay granted.

Summary

Issues:
1. Appropriation of differential duty paid by the appellant from 2004-2008.
2. Demand for interest of Rs. 3,20,017 during the impugned proceedings.
3. Invocation of extended period for recovery of demand.
4. Applicability of limitation under Section 11A for demanding interest.

Analysis:

1. The appellant raised supplementary invoices and collected differential amounts on goods, paying additional Central Excise duty to the department. The impugned proceedings involved the appropriation of the amount paid towards differential duty during 2004-2008, leading to a demand for interest of Rs. 3,20,017.

2. The consultant for the appellant argued that the extended period was wrongly invoked for recovery, as the appellant had been regularly paying differential duty and disclosing details in their filed returns. Citing the case of Ucal Fuel Systems Ltd. v. CCE, Chennai, it was contended that interest could not be demanded without proving suppression, fraud, or mis-declaration, and that the limitation under Section 11A should apply.

3. The Tribunal found merit in the consultant's arguments, agreeing that the requirement of pre-deposit for the demanded amount should be waived. Stay against recovery during the appeal was granted, considering the prima facie case made by the appellant and the applicability of the cited decision regarding limitation under Section 11A.

4. The judgment highlighted the importance of proving suppression or fraud for demanding interest, emphasizing the need for compliance with Section 11A's limitations. The decision to grant stay against recovery during the appeal period was based on the principles established in the Ucal Fuel Systems Ltd. case, ensuring fairness and adherence to legal provisions in the proceedings.