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TMI Blog2007 (4) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... relief the petitioners were permitted to clear the imported goods on furnishing a bank guarantee towards the disputed amount of countervailing duty. The Hon ble High Court also directed that in the event of the importers failing in their challenge to the levy of additional duty, they would be liable to pay interest @ 12% per annum on the amount of differential duty. The said order was to apply in respect of caprolactum already imported and yet to be imported, and accordingly the imported caprolactum was cleared from time to time by filing 939 bills of entry and furnishing bank guarantees aggregating to Rs. 6.50 crores. The writ petition was dismissed vide order dated 28-6-1994 in view of the Bombay High Court s judgment in the case of Ashok Traders v. UOI reported in 1987 (32) E.L.T. 262 (Bom.) which was against the petitioners. The matter was carried in appeal to the Apex Court by filing 1995 (76) E.L.T. 8 (S.C.) = Civil Appeal No. 5974 of 1994 and by order dated 14-11-1994, the Hon ble Supreme Court permitted the Revenue to encash bank guarantees to the extent of Rs. 3.25 crores and directed the petitioners to keep the bank guarantees alive for the balance amount until the dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able value for the purpose of calculation of countervailing duty, in the light of the Bombay High Court s decision dated 28-6-1994 and quantified differential duty recoverable from the importers at Rs. 6,34,87,079/-, ordered appropriation of the amount of Rs. 4,80,13,189/-already paid by them and ordered payment of the balance amount of Rs. 1,54,73,890/- along with interest @ 12%. This order was upheld by the Commissioner (Appeals) by his order dated 13-4-2005; hence this appeal. 4. We have heard both sides. 5. The contention of the appellants that the assessments were provisional and therefore demand against them could be raised only by issue of a show cause notice under the provisions of Section 11A of the Central Excise Act, cannot be accepted in the light of the finding in order dated 31-3-2006 of the Hon ble Bombay High Court in WP No. 2135/2001 filed by the appellants against the rejection of their declaration under the KVSS, 1998. In paragraph 24 of the judgment, the High Court has held as under :- 24. The endorsements made on each of the bills of entries in question may not constitute provisional assessment as contemplated under Section 18 of the Customs Act, 1962. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... house unless and until the proper duty is paid. It is not denied before us that the appellants are liable to pay excise duty in accordance with Notification No. 42 of 1981, dated 1-3-1981, as amended by Notification No. 88 of 1981, dated 31-3-1981. It is common case that in so far as set-off was allowed to the extent of duty under item 68 on inputs like potassium chloride, glue and phosphorous, which set-off was denied where duty was paid through banderolls, it was unsuccessfully challenged in W.P. 1554 of 1981. During the pendency of this Writ Petition No. 1554 of 1981, batch, the respondent was prevented from collecting the proper duty as per the above notifications, since injunction was operative admittedly between 24-3-1981 and 19-11-1981. Thereafter, after the dismissal of the batch of the writ petitions all that is done by the impugned notice dated 20-11-1981, which has already been extracted, is to call upon the appellants to pay the differential duty. In our considered view, on removal under Rule 9 which, as seen above, prescribes the time and the manner of removal, the charge under Section 3 gets attracted. Properly speaking only on the payment of that duty which the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is a stage following levy under the scheme of the Act. Obviously, there was no interim direction of the High Court in the matter of issue of notice for the purpose of levy of duty. Under Section 3 of the Central Excise Act which is a charging section clearly shows that the levy and collection are two distinct and separate steps. Therefore, the benefit of Explanation is not available to the facts of the case and the demand was barred by limitation . 10. I have carefully considered this plea advanced by the learned Advocate for the appellants but I am unable to agree with the same. I find that the facts in all the cases relied upon by the learned Counsel which lay down the proposition that demand of short levy made on RT12 returns does not meet the requirement of Section 11A which stipulates issuing of the show cause, are different from the facts of this case. Facts in those cases have been where the department has chosen to raise the demand on RT12 after it had approved a classification list at lower rates. For example in Kosan Metal s case the goods had been assessed in the manufacturer s factory under T.I. 26A(l)(a) as mentioned in the relevant gate pass of the manufacturer an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 11A notice. 8. The next question that arises for our consideration is whether the demand of interest is sustainable. According to the Revenue, the interest demand is based on the interim order of the Bombay High Court dated 2-5-1986 in W.P. 1174 of 1986. However, we note that when the writ petition was finally disposed of, there was no order directing that the duty demand shall be paid together with interest. In other words, there was no continuation of the interim order for payment of interest in the final order of the High Court. When the matter was taken up before the Hon ble Supreme Court, the Apex Court only directed payment of interest by the Revenue in the event of the Revenue failing before the Supreme Court. There was no direction that in the event of the assessees failing in the appeal before the Apex Court, they would be liable to pay duty amount together with interest. In these circumstances, we cannot bring ourselves to agree with the stand of the Revenue that the order for payment of interest can be sustained for the reason that it can be traced to the interim order of 1986 of the Bombay High Court. We, therefore, set aside the demand for interest. 9. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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