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TMI Blog2006 (7) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... dropping of the case proceedings vide the above referred Order-in-Original. 2. In brief, the facts of the case are that the department had issued Show Cause Notice to M/s. Veekay Alloys Conductors P. Ltd. Jabalpur (M.P.), requiring them to show cause to the Asstt. Commissioner, Central Excise Division - Jabalpur as to why - (i) the interest amount Rs. 1483/- should not be recovered from them as per provisions laid down under Section 11AB of the Act. 3. The Adjudicating Authority vide Order-in-Original No. 38/DEM/ 05-06, dated 27-10-05 has dropped the proceedings initiated vide referred Show Cause Notice on the grounds that differential duty arising out of enhanced price as per contract has been entirely paid by the respondent mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d amount of interest was an offshoot of audit objection raised in the matter. (2) the Hon ble Commissioner, Central Excise, Bhopal has not cited any reference of Supreme Court, High Court and CESTAT on the subject issue in his review order dated 15-5-2006 to support the case except simple quoting of the Section 11AB of the Act in re-demand of the said interest on differential duty, accrued due to variation clause made in the contract/purchase order and known to the respondent subsequently. (3) the respondent relied on the case law 2006 (193) E.L.T. 417 (Tri.-Bangalore) in which it is held that it is an admitted fact that duty is to be determined under Section 11A of the Act and as such interest cannot be charged in absence of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balpur asking the respondent to pay interest of Rs. 1,483/- under Section 11AB of the Central Excise Act, 1944 (The provisions of Rule 8(3) of the C. Excise Rules, 2002 were not invoked as wrongly mentioned in the Review application). The lower authority dropped the proceedings against which the Review application has been filed by the appellant. 8. The differential excise duty depending upon the price increase was paid by the respondent in the year 2001-02. The show cause notice dated 10-8-05 was issued after a gap of around 4 years and, in any case, after 1 year of the payment of the differential duty. No suppression of facts or fraud on the part of the respondent was alleged in the show cause notice nor is there any such evidence forth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the liability to pay duty did not arise as a result of any actor omission by the appellant, then the provisions of Section 11B will not apply. In the said case, the assessee concerned, who had availed Modvat credit under Rule 57A, was asked to reverse the Modvat credit on the stock of inputs and those used in the manufacture of the textured yarn which had become chargeable to specific rate of duty. Interest under Section 11AB was also demanded. The CESTAT held as follows : I however agree that there is no justification for imposition of penalty or for demanding interest under Section 11AB. The credit when it was taken was rightly taken. It is only by subsequent operation of the amended provisions of the rules, the appellant became liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of CCE, Delhi-II v. Machino Montell (I) Ltd., 2004 (168) E.L.T. 466 (Tri.-LB) has taken the same view i.e., where the duty amount is paid by the assessee before the issue of the show cause notice, no penalty can be imposed under Section 11AC of the C. Excise Act, 1944 and no interest can be demanded under 11AB ibid. The Tribunal has been taking the same view in later cases also, including in the case of Indian Petrochemical Corprn. Ltd. v. CCE, Vadodara, - 2006 (198) E.L.T. 193 (Tri.-Mum). Since the respondent had paid the differential Central Excise duty even before the issue of show cause notice, the ratio of the above judgments applies to his case and no interest can be demanded under Section 11AB of C. Excise Act, 1944. The ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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