2014 (10) TMI 124 - AT - Central Excise

Interest on differntial duty - whether the appellant would be liable to pay interest or not - Held that - It is well settled law that the provisions of law, which were in force, during the relevant period, have to be adopted for deciding any disputed issue. Reference in this regard can be made to decision of the Tribunal in the case of CCE, Daman vs. Nirmala Dyechem reported in 2011 (3) TMI 771 - CESTAT, AHMEDABAD . The provision of Section 11AB during the relevant period i.e. prior to 11.05.2001 were providing for interest payment only in those cases where duty of excise have not been levied or paid with intention to evade payment of duty on account of reason of fraud, collusion or any wilful mis-statement or suppression of facts. The Tribunal, while remanding the matter has already held that there is no suppression or any malafide on the part of the assessee and has extended the benefit of limitation as also penalty to the assessee. In such a scenario the provision of Section 11AB, as were in existence during the relevant period, would not get attracted inasmuch as the same related to payment of interest only in case of non payment of duty by reason of fraud, collusion or wilful mis-statement etc. Accordingly, while upholding the confirmation of duty, as not being contested by the appellant, in the present case, we set aside the confirmation of demand of interest - Decided in favour of assessee.

Summary

Issues:
1. Correct classification of appellant's product under Central Excise.
2. Liability for payment of interest by the appellant.

Analysis:

Issue 1: Correct Classification of Product
The dispute in this case revolved around the correct classification of the appellant's product, which consisted of various types of tea. The appellant claimed classification under chapter heading 0902.00, while the Revenue argued for classification under heading 2101.20. The Tribunal, in its order dated 17.12.2009, decided in favor of the Revenue's classification under heading 2101.20. This decision made the appellant liable for payment of differential duty.

However, the Tribunal noted that there was no suppression or misstatement with any malicious intent on the part of the appellant. Consequently, the Tribunal held that the extended period of limitation was not applicable to the Revenue, and the appellant was not subject to any penalty. The penalty was set aside, and the matter was remanded to the original adjudicating authority for quantification of the demand within the limitation period.

Issue 2: Liability for Payment of Interest
The adjudicating authority, in the remand proceedings, calculated the assessed liability along with the confirmation of interest under Section 11AB. The appellant, while depositing the differential duty, contested the confirmation of interest and filed the present appeal.

The key issue to be determined in the appeal was whether the appellant was liable to pay interest. The relevant period for consideration was from September 1999 to January 2000. The Tribunal referred to the case of CCE, Daman vs. Nirmala Dyechem and highlighted that the provisions of law in force during the relevant period should be applied. Section 11AB during that period mandated interest payment only in cases where excise duty had not been levied or paid due to fraud, collusion, or willful misstatement or suppression of facts.

Given that the Tribunal had already ruled out any suppression or malice on the part of the appellant and had extended the benefit of limitation and penalty waiver, the provision of Section 11AB regarding interest did not apply. Consequently, the Tribunal upheld the confirmation of duty, set aside the demand for interest, and disposed of the appeal accordingly.