2018 (5) TMI 1058 - HC - Central Excise

Interest on delayed payment of duty - Section 11AA of the CEA 1944 - assessee contested the demand of interest and failed before the appellate authority. Before the Appellate Tribunal, it was noticed that no steps had been taken by the Department under Section 11A of the Act - Held that - there has to be a determination under Section 11A(2) of the Act preceding any measures taken under Section 11AA thereof - Since the Appellate Tribunal found, as a matter of fact, that there was no determination under Section 11A(2) of the Act, the matter has to be allowed to rest there - appeal dismissed.

Summary

Issues:
1. Determination under Section 11A(2) of the Central Excise Act, 1944
2. Applicability of Section 11AA for interest on delayed payment of duty
3. Compliance with Explanation (1) to Section 11AA

Analysis:
1. The judgment revolves around the determination under Section 11A(2) of the Central Excise Act, 1944. The Appellate Tribunal found that no determination was made under this section in the case at hand. As a result, the matter was concluded based on this factual finding, and the Department failed to provide evidence to the contrary. This finding was crucial in deciding the outcome of the case.

2. The applicability of Section 11AA, which deals with interest on delayed payment of duty, was a significant aspect of the judgment. Section 11AA mandates that before taking any action under it, there must be a prior determination under Section 11A(2) of the Act. Since the Appellate Tribunal confirmed the absence of such determination, the case was not eligible for invoking Section 11AA. This legal requirement was pivotal in the decision-making process.

3. The judgment also addressed the issue of compliance with Explanation (1) to Section 11AA. It was noted that even if a determination under Section 11A(2) was assumed to have been made, the assessee promptly paid the deficit duty within three months of the Supreme Court's order. This timely compliance aligned with Explanation (1) to Section 11AA, further strengthening the assessee's position in the case.

In conclusion, the dismissal of CEXA No.22 of 2016 and GA No.2724 of 2016 was based on the findings related to the determination under Section 11A(2), the application of Section 11AA, and the compliance with Explanation (1) to Section 11AA. The judgment highlighted the importance of procedural compliance and adherence to statutory provisions in matters concerning excise duty payments and interest obligations.