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TMI Blog2008 (11) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... Bansal and Sandeep Goyal, Advocates, for the Petitioner. Shri Kamal Sehgal, Advocate, for the Respondent. [Order per: Adarsh Kumar Goel, J. (Oral)]. - This petition seeks quashing of recovery notice dated 16-1-2008 (Annexure P-9) with regard to liability of the petitioner to pay interest on delayed payment of Central Excise Duty. 2. The petitioner manufactures spun yarn and on the allegation that it mis-stated about the raw material used in manufacturing goods, demand of duty under the provisions of Central Excise Act, 1944 was raised vide order dated 9-12-1992 (Annexure P-1). According to the Department, the petitioner was manufacturing man-made fibre and not spun yarn. The petitioner did not pay the amount and had the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to Rule 8(3) of the Central Excise Rules, 2002, w.e.f. 1-3-2002, liability of interest to be paid by the assessee shall not exceed the amount of duty which had not been paid by due date. 4. In the reply filed, prayer of the petitioner was contested and it is submitted that question of interest arose only after the petitioner did not pay the dues as per order dated 9-12-1992. Claim for interest has been made as per statutory provision, particularly when on account of stay in favour of the petitioner, demand of duty could not be enforced earlier. At the time when order dated 9-12-1992 was passed, there was no statutory provision for interest and therefore, condition for demand of interest could not have been mentioned at the time of pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. We find that under Section 11AA of the Act, the petitioner is under statutory obligation to pay interest at the statutory rate. The judgment relied upon by the petitioner in Kanhai Ram's case (supra) is distinguishable. Therein, there was no stay after the passing of the order and the department failed to take steps to recover. The judgment of Rajasthan High Court in the case of Shree Rajasthan Texchem (supra) and the judgment of Hon'ble Supreme Court in the case of Star Paper Mills (supra), are on different situation, on account of order of Hon'ble Supreme Court and cannot be relied upon as a precedent in the present case. 9. Coming to the last submission, we find that under Rule 8(3) of the Central Excise Rules, the liability o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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