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TMI Blog2016 (2) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... apital goods cleared during the period August 2001 to November 01. We find from the records that appellant's factory was audited by the Audit Department and they noticed, during the period 2001-02 and 2002-03 appellant had removed inputs/capital goods and paid an amount of Rs. 1,92,824/- as differential duty on being pointed out by the audit department which was in respect of valuation of the goods cleared by them. Appellant did not discharge interest and penalty liability. The lower authorities issued show-cause notice dated 12.05.2006 for appropriating the amount of differential duty paid by the appellant and also to recovery of interest and penalty. We find the main ground taken by the appellant is that the differential duty demand w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e invoked for the demand of duty. The same arguments may be used for seeking relief from imposition of penalty and interest. We, with respect reproduce the ratio in paragraphs number 10, 11, 12 and 13 of the judgment. 10. In essence, what sub-section (2) of Section 11A provides for is for non-issuance of notice by the Central Excise Officer to the extent a manufacturer might have voluntarily paid duty even before issuance of show cause notice. When Explanation-2 provides that said provision would not apply in case of fraud, collusion, wilful misstatement, suppression and intention to evade duty, it clearly means that sub-section (2B) is applicable where the normal period of limitation of 1 year is provided. 11. In the present case, when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made, interest liability would follow would bring about an incongruent situation. The recovery of the unpaid or short paid duty would become time-barred. If the manufacturer does not pay it voluntarily, it would not be possible for the Department to recover the same. But if he does it voluntarily despite completion of period of limitation, he would, further be saddled with the liability to pay statutory interest. Surely, this was not the intention of the Legislature while sub-section (2B) was introduced in Section 11A of the Act. In view of the foregoing and in the facts and circumstances of this case, we hold that the impugned order is unsustainable and liable to be set aside and we do so. 6. The impugned order is set aside and the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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