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2015 (10) TMI 666 - HC - Central ExciseDemand of interest - Whether the show cause notice dated 28.10.2004 claiming interest for a period of more than one year is tenable in terms of Section 11A read with Section 11AB of the Central Excise Act, 1944 - Held that - Present appeal is squarely covered by the decision of this Court 2013 (10) TMI 30 - PUNJAB & HARYANA HIGH COURT (Commissioner, Central Excise Commissionerate v. M/s VAE VKN Industries Pvt. Limited), wherein identical issue has been decided in favour of the assessee and against the revenue - respondent is unable to dispute the applicability of the said judgment - Decided in favour of assessee.
Issues:
1. Appeal under Section 35G of the Central Excise Act against the order of the Tribunal. 2. Tenability of show cause notice claiming interest for more than one year. 3. Admissibility of the demand of interest by the adjudicating authority. 4. Appeal before the Commissioner (Appeals) and the Tribunal. 5. Applicability of the decision in Commissioner, Central Excise Commissionerate v. M/s VAE VKN Industries Pvt. Limited. Analysis: 1. The appeal was filed under Section 35G of the Central Excise Act against the order of the Customs, Excise and Service Tax Appellate Tribunal. The substantial question of law for consideration was whether the show cause notice claiming interest for a period exceeding one year was valid under Section 11A read with Section 11AB of the Act. 2. The appellant, engaged in manufacturing LPG cylinders, was found to have wrongly availed Modvat credit during a specific period. Various orders were passed confirming the demand and imposing penalties. Subsequently, a show cause notice was issued for interest, leading to a series of appeals before different authorities. 3. The appellant contended that a similar issue had been decided in favor of the assessee in a previous case, citing the decision in Commissioner, Central Excise Commissionerate v. M/s VAE VKN Industries Pvt. Limited. The court noted that the department had no jurisdiction to issue a show cause notice for interest after the expiry of the limitation period specified under Section 11A of the Act. 4. The court referred to the ruling in Kwality Ice Cream Company case, emphasizing that the period of limitation applicable to the principal amount should also apply to the claim for interest. The judgment in favor of the assessee in the previous case was deemed applicable to the present appeal, leading to the dismissal of the appeal against the assessee. 5. Consequently, the substantial question of law was answered in favor of the assessee, and the appeal was allowed based on the precedent set in the Commissioner, Central Excise Commissionerate v. M/s VAE VKN Industries Pvt. Limited case, highlighting the importance of adherence to statutory limitation periods in such matters.
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