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TMI Blog2010 (6) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... 483 (Tri.-Bang.)], this Tribunal sustained the orders of the Commissioner (Appeals) affirming the above orders. The SLP filed by DECL was rejected by the Hon ble Supreme Court on 15-4-05 [2006 (193) E.L.T. A197 (S.C.)]. Pursuant to the order of the Supreme Court, the jurisdictional Superintendent of Central Excise demanded the unpaid duty as per the orders mentioned above and, interest due on the impugned clearances under Sections 11AA and Section 11AB of the Central Excise Act (the Act). On appeal filed by the appellants against the orders of the jurisdictional Superintendent of Central Excise, the Commissioner (Appeals) directed the assessee to obtain orders from the Assistant Commissioner. Accordingly, the jurisdictional Assistant Commissioner issued notice to the appellants seeking to demand interest under Section 11AA on the differential duty confirmed under order dated 30-12-2001 of the original authority, as well as interest under Section 11AB on the duty confirmed under the order of the original authority dated 30-12-2001 and dated 24-2-2003. He proposed to adjust the Cenvat credit balance of Rs. 30,91,046/- as on 20-7-2005 in the duty due for computing the duty liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gards the challenge to demand of interest in the Orders-in-Original, serial number 1 2 above, the Commissioner ordered as follows in Order-in-Appeal No. 6 7/2007. (iv) Amendment brought in Section 11AA and 11AB came into force with effect from 12th May, 2001, whereas in respect of first demand, since the period of demand is 1-4-2000 to 28-2-2001 and 2nd demand is from 1-3-2001 to 31-1-2002. Since amendment for paying interest came into being with effect from 12th May 2001 the duty liability which arose prior to this date would not be covered under this amendment and therefore, payment of interest on such amount does not arise as there was no suppression alleged in the notice. Revenue has not filed any appeal against the Order-in-Appeal No. 6 7/2007. 4. The appellants sought refund in terms of the above Order-in Appeal dated 30-1-2007. The Assistant Commissioner found that an amount of Rs. 1630805/- was due from the assessee and that there was no excess payment of interest by DECL. The appeal filed against this Order-in-Original was rejected vide Order-in-Appeal No. 209/08, dated 29-6-08. DECL filed appeal No. E/12/09 before us against this order. Appeals No. E/367/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment of the Apex Court in the case of CCE, Kanpur v. Flock (India) Pvt. Ltd. [2000 (120) E.L.T. 285 (S.C.)] applied to the facts of the subject case. The Commissioner (Appeals) had relied on the judgment of the Apex Court in case of Commissioner of Trade Tax, Lucknow v. Kanhai Ram Thekedar [2005 (185) E.L.T. 3 (S.C.)] but had failed to note that when the assessment order did not include interest, its demand thereafter had to be made within a reasonable period; in the instant case, the demand of interest was made four years after assessment. It is submitted that there were errors in computation of the duty demanded in the order dated 29-12-2003. The Commissioner erred in not following the ratio of the decision of the Tribunal in the case of Jindal Vijayanagar Steel Ltd. v. Commissioner of Customs, Mangalore [2006 (200) E.L.T. 263 (Tri. - Bang.)] wherein it was held that assessment having been finalized and the same not having been challenged, subsequent show cause notice to demand interest would not be maintainable. This decision was also upheld by the Hon ble High Court of Karnataka as reported in 2007 (207) E.L.T. 47 (Kar.). In Medley Pharmaceuticals Ltd. v. Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the month succeeding the month in which the duty ought to have been paid for the period till the date of payment of such duty. Interest shall not be demanded without following the above provisions. Interest of Rs. 9,68,336/- for the demand made under order dated 29-12-2003 was wrongly calculated and Rs. 4,32,733/- was the correct amount. They did not contest the following findings of the Commissioner in the impugned order :- (i) with the introduction of amended provisions of Section 11AA/11AB of Central Excise Act, 1944, no interest is demandable for the period from 1-4-2000 to 11-5-2001 and that; (iii) benefit of debit to the Cenvat/Modvat credit allowed by the earlier orders of the Commissioner (Appeals) on 29-9-2003 is available to the appellant company from 29-9-2003 only. Appeal No. E/12/2009 6. The Order-in-Appeal dated 29-6-2008 failed to consider that the original authority was to quantify interest on the duty demand and that it was ordered that for the demand from 11-5-2001, amended provisions of Section 11AA and 11AB of the Act were not applicable. The duty demanded ought to have been paid prior to 11-5-2001. Therefore the amended provisions of Section 11AA and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich had become payable prior to 11-5-2001, and (iii) after re-quantification held that the appellant is liable to pay Rs. 16,30,806/- as difference interest. Therefore, it is seen that the adjudicating authority has followed the directions of the appellate authority and therefore the appellant s contention in this regard is also incorrect. Discussion and decision. 8. We have carefully perused the case records and studied the rival submissions. As the appeal No. E/12/2009 impugnes the orders of the lower authorities implementing the Order-in-Appeal No. 6 7/2007 dated 30-1-2007, we first take up the appeals No. 367/2007 and 707/2009. The issue involved relates to interest payable by the appellants on duty demanded in terms of the following orders dated 30-12-2001, 24-2-2003 and 29-12-2003 :- Order dated Period of dispute Amount demanded towards interest Rs. 31-12-2001 1-4-2000 to 28-2-2001 58,80,441/- 24-2-2003 1-3-2001 to 31-1-2002 1,09,57,179/- (includes interest on duty from 1-3-2001 to 11-5-2001) (38,90,722/-) 29-12-2003 1-2-2003 to 6-1-2003 11,45,30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant provisions of Section 11AA and 11AB hereunder. SECTION 11AA. Interest on delayed payment of duty. - [(1)] [Subject to the provisions contained in section 11AB, where a person] chargeable with duty determined under sub-section (2) of section 11A, fails to pay such duty within three months from the date of such determination, he shall pay, in addition to the duty, interest [at such rate not below [ten per cent.] and not exceeding thirty-six per cent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette], on such duty from the date immediately after the expiry of the said period of three months till the date of payment of such duty : Provided that where a person chargeable with duty determined under sub-section (2) of section 11A before the date on which the Finance Bill, 1995 receives the assent of the President, fails to pay such duty within three months from such date, then, such person shall be liable to pay interest under this section from the date immediately after three months from such date, till the date of payment of such duty. xxx xxx xxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayable or ought to have been paid prior to 11-5-2001 in view of the amendment to the Sections on 11-5-2001. He found that in the case at hand, no interest was payable for the period 1-4-2000 to 11-5-2001 since the duty demand was for duty liable to be paid or ought to have been paid prior to 11-5-2001. As the amended provisions were prospective in nature, the interest due for the period was required to be re-quantified. Accordingly, he remanded the matter to the lower authorities. The Commissioner categorically held that interest was not payable for the Period prior to 12-5-2001 when the provisions of Section 11AA and 11AB were amended. In remand the authorities found that liability to duty of the assessee had been decided subsequent to 11-5-2001. Therefore, interest was correctly payable by the assessee in terms of Section 11AA i.e. after three months of confirmation of the duty demand. The Commissioner had ordered re-quantification of interest liability in the light of his finding and directions. We find that challenge to implementation of this order to the extent contrary to these directions raised in E/12/2009 is liable to be allowed. 11. In the remand proceedings, the Origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrears of sales tax was automatic and no separate notice of demand was required to be served if it was not included in the assessment order. Hence we find that the finding of the Commissioner that no separate notice is needed to demand interest when duty is confirmed is in accordance with law. 12.2 As regards adjustment of Cenvat credit of Rs. 30.91 lakhs, the appellants had sought the same with effect from 30-9-2003 for the purpose of computation of interest liability. This has been allowed by the Commissioner in his order dated 30-1-2007. As regards the prayer to allow this relief from an earlier date, we find that this was not a claim before the Commissioner (Appeals).We find that this is a prayer being made for the first time in the proceedings and before the Tribunal. We reject this claim. 12.3 In the appeal before us, there is a prayer that appellants should ld be allowed interest on the excess amount of interest paid by it and not refunded to it pursuant to application dated 18-1-2006. Whether the interest due to be paid by the appellants and whether it had paid excess interest than due shall be decided by the original authority. If any amount has been paid in excess the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions for issue of show cause notice. The pertinent provisions of Section 11A of the Act read as follows : SECTION [11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or [erroneously refunded, whether or not such non-levy or non-payment, short-levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder], a Central Excise Officer may, within [one year] from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice : Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any willful mis statement or suppression o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an adequate opportunity of hearing. Therefore in the instant case, we find that the demand of interest was made in accordance with law and does not suffer any infirmity. 13.2 As regards the delay in demand of interest, we find that the liability of the assessee to the principal amount itself was in prolonged litigation and was crystallized only with the dispute being finally settled by the Apex Court rejecting the SLP of the assessee challenging the Final Order of the Tribunal in April 2005. The demand for interest was raised immediately thereafter. One of the grounds raised in the proceedings is that Revenue did not issue notice specifying the interest due along with demand for duty in the SCN. As the SCN is issued on a tentative decision about the duty liability alleged, usually, the interest amount will not be known at the time of issue of the SCN. Duty demanded is discharged after the adjudication and also at times after the appeal is decided. Therefore, the assessee cannot assail the demand for raising the interest issue simultaneously with the liability to differential duty. The judicial authorities on similar statutory provisions we have mentioned are also to the effect t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atory penalty together with interest for evasion of duty on account of fraud, collusion, misstatement or suppression of facts. In the present proceedings, we are not concerned with the provisions introduced in the Budget 1996-97 and enacted in the relevant Finance Act. The provisions contained in the Section 11AB introduced in 1996-97 Budget was penal in nature and was payable by the assessee who had evaded duty on account of fraud, collusion, misstatement and suppression of facts. We do not find that this argument is relevant to the appeal. We are not concerned with these original provisions. 13.6 Yet another argument raised is that the interest demand after assessment of duty on the impugned clearance and without challenge to the same was contrary to the ratio of the Apex Court judgment in the case of CCE, Kanpur v. Flock (India) Pvt. Ltd. [2000 (120) E.L.T. 285 (S.C.)]. We find that the ratio of this judgment is that no refund of excess duty paid can be claimed unless the assessment is successfully challenged. In the facts of the case at hand, the ratio does not apply. The facts of the subject case are different. There is no dispute as to the duty liability assessed and eventu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi Steel Industries cited, the High Court held that liability to pay interest under Section 11AA of the Act did not arise when show cause notice itself did not propose levy of interest on duty. In this case, the Hon ble High Court dismissed an application filed by the Revenue u/s 35 G of the Act in limine finding that the Revenue had not canvassed the case before the Tribunal and the Member (J) in the order impugned before their lordships had held the view that notice was necessary to demand interest. We find that the High Court did not lay down a ratio after analyzing the dispute in this case. The Tribunal in the case of Commissioner of Central Excise, Noida v. Prisma Polyfabs Pvt. Ltd. [2003 (162) E.L.T. 381 (Tri. - Del.) held that interest could not have been demanded without invoking provisions of Section 11AB in the show cause notice. We have already dealt with this issue in the light of the judgment of the Apex Court. In Gokak Patel Vokart Ltd. v. Collector of Central Excise, Belgaum [1987 (28) E.L.T. 53 (S.C.) case, it was held that show cause notice was a condition precedent to a demand under subsection (2) of Section 11A. We have already discussed this requirement of issua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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