2016 (8) TMI 38 - AT - Central Excise

Interest on delayed payment of differential duty - period of limitation - demand of interest issued after 3 years - At the time of clearance, the Appellants adopted the CAS-4 data of previous year to arrive at the cost of production, and on receipt of the actual data, they re-determined the assessable value and paid the differential duty. - Held that - It is the contention of the Appellant now before this forum is that the demand for interest since issued in 2012, hence barred by limitation. - following the decision in the case of Hindustan Insecticides Ltd (2013 (8) TMI 225 - DELHI HIGH COURT), demand of interest set aside - Decided in favor of assessee.

Summary

Issues:
- Appeal against demand for interest on delayed payment of differential duty
- Applicability of limitation period for the demand of interest

Analysis:
1. Appeal against demand for interest on delayed payment of differential duty:
The case involved the Appellants who manufactured and cleared excisable goods, determining the assessable value under Rule 8 of the Central Excise Valuation Rules, 2000. They paid the differential duty after recalculating the assessable value based on actual data but did not pay the interest on the delayed payment. A show-cause notice was issued for recovery of interest for the period between April 2007 to March 2009. The Appellant contended that the demand for interest issued in 2012 was barred by limitation. The learned Advocate for the Appellant cited various judgments, including the decision of the Hon'ble Delhi High Court in Hindustan Insecticides Ltd case, to support the contention that the demand was time-barred.

2. Applicability of limitation period for the demand of interest:
The Tribunal analyzed the arguments presented by both sides and referred to the judgments cited by the Appellant. The Tribunal noted that the Appellant had paid the differential duty but had not discharged the interest on it. Citing the decision of the Hon'ble Delhi High Court in Hindustan Insecticides Ltd case and the judgment of the Hon'ble Gujarat High Court in CCE Vadodara-II Vs Gujarat Narmada Fertilizers Co Ltd, the Tribunal found that the demand for interest issued after a significant delay was beyond a reasonable period. The Tribunal concluded that the demand for interest was barred by limitation and set aside the impugned order, allowing the appeal in favor of the Appellant.

In conclusion, the judgment by the Appellate Tribunal CESTAT Ahmedabad addressed the issues of appeal against the demand for interest on delayed payment of differential duty and the applicability of the limitation period for such a demand. The Tribunal ruled in favor of the Appellant, setting aside the order and providing relief based on the precedent established in relevant legal cases.