Prospective levy of interest under Central Excise law applies only to post-commencement duty demand, not earlier periods.

Interest under Section 11AB of the Central Excise Act applies prospectively and cannot be levied for any period before the provision came into force. Where a confirmed duty demand spans both pre-insertion and post-insertion periods, interest is recoverable only on the portion attributable to the post-commencement period. A separate challenge to penalty findings under Section 11AC or Rule 173Q does not prevent consideration of the interest claim where the Revenue has specifically disputed denial of interest. The text therefore states that interest was payable only for the duty demand relating to the post-28-9-96 period.

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Issues: Whether interest under Section 11AB of the Central Excise Act, 1944 was payable on the duty demand for the period after the provision came into force, notwithstanding that part of the demand related to an earlier period.

Analysis: Interest under Section 11AB is not available for periods anterior to its insertion, but where the confirmed duty demand covers a span extending beyond the date on which the section became operative, interest is leviable on the portion of the demand relatable to the post-insertion period. The pendency or acceptance of findings relating to penalty under Section 11AC or Rule 173Q does not bar consideration of interest under Section 11AB when the Revenue has specifically challenged the denial of interest.

Conclusion: Interest under Section 11AB was held payable only for the part of the duty demand pertaining to the period from 28-9-96 to 8-9-97, and the Revenue's appeal succeeded to that extent.

Final Conclusion: The order denies retrospective application to the interest provision while sustaining interest liability for the post-commencement portion of the duty demand, resulting in partial relief to the Revenue.

Ratio Decidendi: Interest provisions operate prospectively and are recoverable only for the period to which the statutory levy has already come into force.

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