2009 (12) TMI 828

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..... was determined against the assessees. The demands were set aside by the Commissioner (Appeals) vide order dated 20-6-1995. The Order-in-Appeal was set aside by the Tribunal and the case was remanded to the Commissioner (Appeals) by Tribunal's Final Order dated 24-1-1997. The demand was re-confirmed by the Commissioner (Appeals) vide order dated 26-12-2000. It is the contention of the Revenue that since the demand of Rs. 34 lakhs earlier confirmed vide order dated 9-1-1995 and 10-2-1995, although set aside by the Commissioner (Appeals) vide order dated 20-6-1995, was restored by the Commissioner (Appeals) vide order dated 26-12-2000, the determination of duty has taken effect in January and February itself and therefore, due to delay in paym .....

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..... n of compensating the State by way of interest. The fact that duty subsequently has been ascertained and becomes payable from the date when it was due, does not make a party liable for interest from that date. That situation is covered by the explanations to the Section. 17. Section 11AA has two explanations. By virtue of the first explanation, if duty payable is reduced, then the date of determination of reduction shall be date on which the amount of duty is first determined to be payable. In other words interest would be payable on the duty as reduced not from the date of such reduction of duty but from the date of the first order. That is because even if the duty is reduced there is still an order of determination but a reduced amount. .....

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..... 000. The matter was before the A.O., for fresh determination on which an order came to be passed on 22nd March, 2002 and consequently the duty came to be ascertained on 22nd March, 2002. Duty was paid on 17th July, 2002. Once the duty was ascertained on 22nd March, 2002 no interest could have been demanded under sub-section (1) of Section 11AA in view of sub-section (2) as inserted in Section 11AA on 11th May, 2001. Following the ratio of the above decision, we uphold the finding that the assesses are not liable to pay interest, uphold the impugned order and reject the appeal. 3. The cross-objection is only in the nature of comments upon/reply to the Revenue's appeal and is accordingly dismissed. (Dictated and pronounced in open court)

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