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TMI Blog2020 (2) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is delay in payment of duty/ tax, the revenue should proceed to recover the interest due on the said admitted tax/ duty along with the admitted duty/ tax. Thus, recovery of interest under section 11AB of the Central Excise Act, 1944/ Section 75 of the Finance Act, 1994 is not a consequence of confirmation of demand made in terms of Section 11A of Central Excise Act, 1944/ Section 75 of Finance Act, 1994 but is a consequence of delay in payment of duty/ tax. Hence just for the reason that Commissioner (Appeal) has held that demand of duty/ tax cannot be sustained for the reason that assessee has already paid the duty/ tax would not come in the way of recovery of interest that I due for the reason of delay in payment of tax. The interest that is due needs to be recovered as sums due to the government by application of provisions of Section 11 of Central Excise Act, 1944. - Service Tax Appeal No. 1849 of 2010 - Final Order No. 60137 of 2020 - Dated:- 22-1-2020 - HON BLE MR. ASHOK JINDAL, MEMBER (JUDICIAL) AND HON BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Shri Tarun Kumar, Authorised Representative for the Appellant None, for the Respondent ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s pari-materia to Section 75 of The Finance Act, 1994 held as follows: 10. So far as interest Under Section 11AB is concerned, on reference to text of Section 11AB, it is evident that there is no discretion regarding the rate of interest. Language of Section 11AB(1) is clear. The interest has to be at the rate not below 10% and not exceeding 36% p.a. The actual rate of interest applicable from time to time by fluctuations between 10% to 36% is as determined by the Central Government by notification in the official gazette from time to time. There would be discretion, if at all the same is incorporated in such notification in the gazette by which rates of interest chargeable Under Section 11AB are declared. The second aspect would be whether there is any discretion not to charge the interest Under Section 11AB at all and we are afraid, language of Section 11AB is unambiguous. The person, who is liable to pay duty short levied / short paid / non levied / unpaid etc., is liable to pay interest at the rate as may be determined by the Central Government from time to time. This is evident from the opening part of Sub-section (1) of Section 11, which runs thus: Where any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the discussion hereinabove. The first one is civil liability whereas second is penal, if not criminal, liability. This is because Under Section 11AC, existence of mensrea is a must, whereas Under Section 11AB, it may be innocent evasion or omission to pay the duty. The judgment of the Supreme Court is brief and it is not possible to judge whether issue regarding interest was also agitated by the department before the Hon'ble Apex Court. Otherwise also, we have already pointed out that this is a judgment, which can safely be presumed to be regarding the duty payable for a period prior to insertion of amendments by Act No.14/2001 with effect from 11.5.2001, which have clarified the distinction between Sections 11AB and 11AC by virtue of Sub-section 2B and Explanations below the same. Second explanation below Sub-section 2B reads thus: Explanation (2) : For the removal of doubts, it is hereby declared that the interest Under Section 11AB shall be payable on the amount paid by the person under this sub-section and also on the amount of short payment of duty if any as may be determined by the Central Excise Officer, but for this sub-section. It is evident that explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of according an opportunity to the assessee to show cause as to why interest may not be charged or penalty may not be imposed. The department would be justified in issuing show cause notice pertaining to duty as well if the duty as ascertained by the assessee himself and paid is less than duty as prima facie ascertained by the officer of Central Excise. In any case, we are unable to agree with the submission by learned Counsel Shri Kolte that on payment of short duty as under Sub-section (2B), before issuance of show cause notice, no interest Under Section 11AB can be charged, by virtue of portion of Section 11AB(2B) reproduced hereinabove. 12. Learned Counsel Shri Kolte has also placed reliance upon the tail piece of Explanation (2) to Sub-section (2B) reading but for this subsection . According to him, but is a conjunction used to indicate the intention of those who use it to limit or restrain the sense or effect of something, which had before been said. He has obtained this meaning from Law Lexicon by P.Ramnatha Aiyar. In order to examine the submission by learned Counsel as to whether this terminal part of Explanation (2) gives the explanation so Page 1614 much s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (2) or Sub-section (2B) of Section 11A, till the date of payment of such duty. Thus, why the clause but for is used, is evident from the tail piece of Section 11AB(1). Ordinarily, the interest is payable till payment of short duty as adjudicated, but in view of Sub-section (2B), which gives liberty to the party to pay the short duty even before determination or without determination by the officer of Central Excise, the interest would stop to run to the extent of amount deposited by self ascertainment and on the date such amount is so deposited. If the tail piece of Explanation (2) was to be so strong as to nullify the effect of Sub-section (2B), Section 11AB would not have incorporated within it the clause or has paid the duty under Subsection (2B) . Reading Section 11AB together with Section 11A(2B) and Explanation (2), we are unable to accede to the interpretation tried to be attributed by Advocate Shri A.P. Kolte to Explanation in question. 13. For all these reasons discussed, we are unable to agree with the proposition that interest Under Section 11AB is also not chargeable in case the short duty or unpaid duty is deposited with the Government before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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