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TMI Blog2011 (3) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... e very same amendment by which this interest on delayed payment of duty was made leviable - Therefore, the order passed by the Tribunal holding that as the duty was paid even before the issue of show cause notice under sub-section (1) of Section 11A and, therefore, no interest is leviable is contrary to the aforesaid statutory provision as well as the law declared by the Apex Court and, therefore, it cannot be sustained - Accordingly, it is hereby set aside - The substantial question of law framed in this appeal is answered in favour of the revenue and against the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Act, 1944 merely because this was voluntarily paid? 7. Learned counsel for the revenue assailing the impugned order contended that, in view of insertion of sub-section (2B) by Act No. 14/2001 which came into effect from 11-5-2001 read with the amendment carried to the said subsection by Act 32/2003 which came into effect from 14-5-2003 and in particular explanation (2), differential duty paid after clearance indicates short payment/short levied on the date of removal and hence interest becomes leviable. Therefore, he submits the order passed by the Tribunal is contrary to the aforesaid statutory provisions, as such it is liable to be set aside. In fact he relied on two judgments of the Apex Court. 8. Per contra, learned counsel for the assessee relied on a judgment of the Division Bench of this Court in the case of Commissioner of Central Excise, Bangalore-III v. Bharat Heavy Electricals Limited [2010 (257) E.L.T. 369 (Kar.) where it is held that, "the provisions envisaged under Section 11AB of the Act are not applicable to the facts of the present case as in the instant case there has been no determination of the duty nor there has been short payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty ascertained by a Central Excise Officer" in sub-section 2B was inserted by Act 32/2003 which came into effect from 14-5-2003. 10. Therefore, the legislature has not kept anyone in doubt. Section 11AB of the Act provides for interest on delayed payment of duty. It provides that, where any duty of excise has not been levied or paid or has been short-levied or short paid or erroneously refunded the person who is liable to pay the duty as determined under sub-section (2), or has paid the duty under sub-section (2B), of Section 11A shall, in addition to the duty, be liable to pay 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, from the first date of the month succeeding the month in which the duty ought to have been paid under this Act, or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2), or sub-section (2B), of Section 11A till the date of payment of such duty. Therefore, Section 11AB provides for interest on delayed payment of duty. Explanation (2) makes it clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be given the demand notice under sub-section (1). But, Explanation 2 to the sub-section makes it expressly clear that such payment would not be exempt from interest chargeable under Section 11AB, that is, for the period from the first date of the month succeeding the month in which the duty ought to have been paid till the date of payment, of the duty. What is stated in Explanation 2 to sub- Section (2B) is reiterated in Section 11AB that states where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person who has paid the duty under sub-section (2B) of Section 11A, in addition to the duty be liable to pay interest……..It is thus to be seen that unlike penalty that is attracted to the category of cases in which the non-payment or short payment etc., of duty is "by reason of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any of the provisions of the Act or of Rules made thereunder with intent to evade payment of duty" under the scheme of the four Sections (11A, 11AA, 11AB & 11AC) interest is leviable on delayed or deferred payment of duty for whatever reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of removal hence, interest which is for loss of revenue, becomes leviable under Section 11AB of the Act. In our view, with the entire change in the Scheme of recovery of duty under the Act particularly after insertion of Act 14 of 2001 and Act 32 of 2003, the judgment of this Court in the case of M.R.F Limited (supra) would not apply." 12. However, this Court in the case of Bharat Heavy Electricais case (referred to supra) held as under : - "6. Having heard the counsel on both sides and on perusal of the material on record, we find that the show cause notice issued on 19-10 2004 was not in respect of any demand made regarding non-payment of duty on account of there being a price variation, but the demand made was only with regard to delayed payment of duty and for payment of interest and penalty. To the said show cause notice, reply has been given by the assessee by contending that in the first place, when there was actual removal of the goods and the appropriate duty has been paid based on the price of the goods. In the second place, when there was a transaction when there was escalation in the cost of goods with regard to the said price variation also there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leared and the appropriate duty had been paid subsequently, the price escalation was due to the increase in input labour and other costs which was determined by the All India Industrial Price Indices and by the Reserve Bank of India communicated by all India Electrical Manufacturers Association. In terms of the said direction, the supplementary invoices were issued to facilitate the recovery of the expenditure of cost escalation and the enhanced duty thereon was paid. Therefore, as on the date the goods were cleared initially, if such a price escalation had not taken place, then the assessee could not foresee, the subsequent escalation in price. However, in the instant case the assessee paid duty on the differential price also. Therefore, we cannot apply the said decision to the present case." 13. The said judgment rendered by this Court is contrary to the law declared by the Apex Court in the aforesaid two judgments. Further, the said Judgment does not take into consideration the explanation to sub-section (2B) of Section 11A and accordingly, it is a judgment "per incuriam". Therefore, the law laid down by this Court in the aforesaid judgment is not a good law. 14. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (2B) of Section 11A came into fore. This is clear from sub-section 2C of Section 11A which reads as under : - "(2C) The provisions of sub-section (2B) shall not apply to any case where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President" 16. Therefore, this provision is made only prospective. It has no retrospective operation. The intention of the legislature is made clear by express words by incorporating sub-section (2C) by the very same amendment by which this interest on delayed payment of duty was made leviable. 17. Therefore, the order passed by the Tribunal holding that as the duty was paid even before the issue of show cause notice under sub-section (1) of Section 11A and, therefore, no interest is leviable is contrary to the aforesaid statutory provision as well as the law declared by the Apex Court and, therefore, it cannot be sustained. Accordingly, it is hereby set aside. The substantial question of law framed in this appeal is answered in favour of the revenue and against the assessee. 18. At this stage it was pointed out that the Central Board of Excise an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the facts of the case. 19. It is true that the instructions came into effect from 1-11-2010, whereas the present appeal is filed on 7-3-2008. The subject matter of this appeal is Rs. 27,802/- which is less than Rs. 2 Lakhs. Though the said circular is not applicable as the appeal had already been filed before the instructions came into force and the appeal involves a substantial question which we have answered in the above paras, the assessee should not be denied the benefit of the said circular. If only this appeal had been filed after the instructions, the appeal could not have been filed, even if substantial question of law is involved as it is well settled in fiscal legislation, the principles of res judicata is not attracted. But, as the appeal was filed and we have already answered the substantial question, in the facts of this case, we are satisfied that the assessee is entitled to the benefit of the policy underlining the instructions, as the amount involved in this appeal is hardly Rs. 27,802/-. 20. For the reasons aforesaid, the appeal is allowed. The impugned order passed by the Tribunal is hereby set aside. The substantial question of law is answered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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