2024 (2) TMI 429 - AT - Central Excise

Interest on delayed payment of oil cess under Section 11AB of the Central Excise Act, 1944 - HELD THAT - The issue is no longer res integra as the liability of interest on belated payment of Oil Cess has already been decided by this Tribunal in the case of C.C.E. S.T., DIBRUGARH VERSUS OIL AND NATURAL GAS CORPORATION LTD. 2017 (3) TMI 1620 - CESTAT KOLKATA which was affirmed by the Hon ble Gauhati High Court in COMMISSIONER OF CENTRAL EXCISE VERSUS OIL AND NATURAL GAS CORPORATION 2018 (6) TMI 1485 - GAUHATI HIGH COURT . In this case, this Tribunal has held that Section 15(4) of the OID Act does not provide for payment of interest and accordingly decided the issue against the department. It is held that no interest payable on delayed payment of oil cess under Section 11AB of the Central Excise Act, 1944, as Section 15(4) of the OID Act does not provide for payment of interest - there are no infirmity in the impugned order passed by the Commissioner (Appeals) - appeal filed by revenue is dismissed.

Summary

Issues involved:
The appeal concerns the question of whether interest can be charged on delayed payment of oil cess under Section 11AB of the Central Excise Act, 1944.

Facts:
The Respondent, a company engaged in manufacturing Crude Petroleum Oil, was required to pay Oil Cess as per the Oil Industry Development Act, 1974. The Ministry of Petroleum and Natural Gas prescribed an effective rate of Oil Cess at Rs 900.00 per M.T., but the Respondent paid only Rs. 853 per M.T. Show cause notices were issued proposing recovery of the shortfall along with interest under Section 11AB of the Central Excise Act, 1944. The Respondent paid the shortfall but disputed the interest. The adjudicating authority ordered for interest recovery, which was later set aside by the Ld. Commissioner (Appeals).

Submissions:
The Respondent argued that the OID Act does not provide for payment of interest on delayed Oil Cess payments, citing a previous Tribunal decision. The Appellant department contended that since Cess is collected under the Central Excise Act, provisions for interest apply to delayed payments to prevent arbitrary payment behavior by oil companies.

Decision:
The Tribunal referred to a previous case where it was held that the OID Act does not mandate interest payment on delayed Oil Cess. Following this precedent, the Tribunal ruled that no interest is payable on delayed oil cess payments under Section 11AB of the Central Excise Act, 1944, as Section 15(4) of the OID Act does not address interest payments. Consequently, the impugned order was upheld, and the department's appeal was rejected.