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TMI Blog2014 (10) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... CHENNAI), taking into consideration the ratio laid down in the cases of Elastolan Engineers Pvt. Ltd. (supra) and Lucid Colloids Ltd. (2005 (8) TMI 134 - HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR) has held that interest on delayed payment would be payable as per Section 11AB. - Appellant is liable for payment of interest on the delayed payment for the disputed period as provided under Section 11AB of Central Excise Act i.e. 13 % per annum. Accordingly, the impugned order is modified to the extent of charging interest @ 13% per annum as provided under Section 11AB and I uphold the penalty. - Decided partly in favor of assessee. - Appeal No. E/936/2006 - FINAL ORDER No.40514/2014 - Dated:- 19-8-2014 - Shri R. Periasami, J. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority has taken interest amount of ₹ 1000/- per day and computed total interest amount of ₹ 71,457/- as per Rule 8 (3) of Central Excise Rules. He further submits that Section 11AB of Central Excise Act which prescribes interest on the delayed payment of duty overrides the Rule and cannot exceed beyond the provisions of Section 11AB. Section 11AB prescribes interest on delayed payment at 13% per annum during the relevant period. He also submits that the government cannot impose higher interest under Rule 8 as Section 11AB only empowers charging interest on delayed payment. He relies on the following Tribunal's decisions :- (1) Kanagadurga Clothers Pvt. Ltd. Vs CCE - 2010 (253) ELT 310 (Tri.-Chennai) (2) Elastolan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Lucid Colloids Ltd. (supra), the Hon'ble Rajasthan High Court has held that interest @ 2% per month is liable to be paid on the delayed payment of duty. 5. Heard both sides. I find that the issue is limited to the demanding of interest on the delayed payment for the period July 2004 to October 2004 wherein the department has calculated interest as per Rule 8 (3) at the rate of ₹ 1000/- per day which is equivalent to the duty determined under Rule 8(3). It is pertinent to state that consequent on the Hon'ble Rajasthan High Court's judgment (supra), the Government has amended the provisions of Rule 8 (3) subsequently. The relevant amendment of the Notification reads as under :- If the assessee fails ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... default and delay in payment are one and the same. In view of the fact that the Court and Tribunal have already held that interest at a rate higher than that provided under Section 11AB cannot be prescribed under Subordinate rules, the appellants were required only to pay the prescribed rate of interest (15%) in the first period and 13% in the later period. Accordingly, the impugned order is set aside to the extent it demands interest in excess of the rates prescribed under Section 11AB of the Act. The appellants are directed to pay the interest amount at the prescribed rates within four weeks from today, as undertaken by the ld. advocate. The appeal is allowed in the above terms. The stay petition also stands allowed. 6. Taking into f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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