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TMI Blog2015 (9) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... the Constitution of India and also to set aside the consequent demand. 2. In all the above Writ Petitions, the issue that arise for consideration is whether interest is chargeable in terms of Rule 8(3) Central Excise Rules or under the provisions of Section 11AB of the Central Excise Act. 3. It is submitted by both the learned counsel appearing for the petitioners as well as the learned Standing Counsel appearing for the respondents that the issue involved in these Writ Petitions is covered by a decision of the Rajasthan High Court in the case of 2006 (200) E.L.T. 377 (Raj.) (Lucid Colloids Limited V. Union of India), wherein the Rajasthan High Court held that Rule 8(3) of the Central Excise Rules to the extent it provides levy of intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st at monthly rates. Interest rate @ 2% per month can only be read as 24% per annum. Providing alternative levy of interest Rs. 1,000/- per day, if it is higher than the interest chargeable at the rate prescribed, is clearly by way of penalty and contrary to enabling power conferred on Rule Making Authority under Section 11AB of the Act. 11. Section 11AB clearly relates to charge of rate of interest related to amount in default for the period, the assessee remains in default of payment. Permitting charge of interest at the rate of Rs. 1,000/- per day is not computable in relation to amount of Duty in default. Whether Rs. 1,00,000/- is not paid in time or Rs. 1,000/- is not paid in time, the interest chargeable under the Rules remains Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 11AB. Consequently, the demand notices are quashed and interest on delayed payment has to be recomputed only to the extent it is referred to the rate of interest @2% per month or 24% per annum under Rule 8(3). 6. The above-said decision was followed by the Gujarat High Court in the case of K.C.& Sons Applicances Pvt. Ltd. V. Union of India reported in 2014 (306) ELT 249 (Guj.). 7. We are in respectful agreement with the above-said decisions. Accordingly, Rule 8(3) of the Central Excise Rules in respect of levy of interest at the rate of Rs. 1000/- per day is held to be invalid. Consequently, the demand raised at whatever stage insofar as levy of interest at Rs. 1000/- per day in terms of Rule 8(3) of the Central Excise Rules is als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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