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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 ..... clusion that appeal filed by the Revenue is to be dismissed, I would like to place on record my views as stated in the following paragraphs. 2. The revenue has filed this appeal for the reason that because respondents have paid the entire tax, Commissioner has set aside the confirmation of demand by the adjudicating authority. The respondents though have paid the paid the tax/ duty have not deposited the interest due on account of delay in payment of the tax/ duty. Hence when Commissioner (Appeal) has set aside the proceedings for demand of tax/ duty, it would impact the recovery of interest which has not been paid by the respondents. 3. It is well settled law and Hon'ble Apex Court has constantly held that demand of interest under a fiscal statue is absolute liability and arises on the account of late payment of tax from the due date. Since the liability is absolute no separate proceedings are required for recovery of interest. In case of admitted duty/ tax liability if there 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. Reference in this respect needs to be made to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is compulsory and even though the evasion of duty is not mala fide or intentional. 11. The question then arises whether payment of duty before issuance of show cause notice exempts the assessee from liability to pay interest Under Section 11AB. Learned Counsel Shri Kolte had placed reliance upon concluding para in the judgment of CESTAT Bengalore in the matter of Rashtriya Ispat Nigam Ltd. v. Commissioner of Central Excise, Visakhapatnam, which reads thus: In these circumstances, there is no justification on the part of the department to impose penalty Under Section 11AC as well as under Rule 173Q of the Central excise Rules, 1944. Consequentially, no interest also is payable. In the matter, penalty Under Section 11AC is held non-imposable because the amount of duty was paid before issuance of show cause notice. The observation "consequentially no interest is also payable", according to Advocate Shri Kolte, was confirmed by the Hon'ble the Supreme Court while dismissing the appeal of the department. First of all, with due respect, it must be said that on going through the entire judgment of the Tribunal at Bangalore, there does not appear any submissions advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay interest over the same even without going through the process of determination as contemplated by Section 11A(1) and (2) commencing with a show cause notice and culminating with an order of the Central Excise Officer. The show cause notice and determination can go on if the short duty is not paid, but even if short duty is paid by taking liberty under Subsection (2B), we are afraid, that does not absolve the assessee from the liability to pay interest thereon. In case by proceeding with the show cause notice, if the Central Excise Officer determines short duty payable higher than as ascertained and paid by the assessee himself, the assessee would be liable to pay interest Under Section 11AB upon the same. Emphasis by Advocate Shri Kolte was on the tail piece of Sub-section 2B. According to him, once the short duty is paid before issuance of show cause notice, the department is prohibited from issuing show cause notice and, therefore, there cannot be any adjudication Under Section 11A(1) and (2) and, therefore, there can not be any imposition of either interest Under Section 11AB or penalty Under Section 11AC. We quote the tail piece, relied upon by Advocate Shri Kolte: ... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay interest. Taking into consideration that the tail piece relied upon by learned Counsel is included in the Explanation to particular Sub-section (2B), we are unable to accept the interpretation as tried to be attributed by the learned Counsel for one simple reason that an explanation ought to be there for the purpose of explaining the main provision, it cannot nullify the effect of main provision. If Explanation (2) interprets as attempted by learned Counsel due to the phrase with which it ends "but for this sub-section", the explanation will have to be ignored being in conflict with Sub-section (2B), which it explains. However, the meaning of this clause "but for this sub-section" can be enlightened when we refer to Section 11AB(1), we have reproduced two portions of this provision (in parts) in the earlier part of this judgment and for the sake of convenience, now we are quoting entire Sub-section (1) of Section 11AB, which reads: 11AB. Interest on delayed payment of duty: (1) 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 duty as determined under Sub-section (2), or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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