CESTAT confirms duty demand but sets aside interest charge under Section 11AB; emphasizes fraud requirement.

The Appellate Tribunal CESTAT, New Delhi confirmed duty demand in one appeal but set aside the interest charge under Section 11AB. In the other appeal, both the interest charge and duty confirmation were set aside pending recalculation of the correct duty amount by the adjudicating authority. The Tribunal emphasized that interest on short paid duty could only be levied in cases of suppression of facts or fraud, which was not proven in this instance before the relevant amendment to Section 11AB.

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Issues:
Confirmation of duty demand and charging of interest under Section 11AB.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi addressed two appeals challenging duty demands confirmed by the Commissioner along with the charging of interest under Section 11AB. The appeals were disposed of together due to identical facts and issues. The duty confirmation was not contested by the appellants, as they had already deposited the duty before the issuance of the show cause notice. However, the main contention was against the charging of interest under Section 11AB. The appellants argued that since the duty was paid before the notice and there was no suppression of facts or fraud, interest should not be levied. On the other hand, the SDR supported the impugned order.

In one of the appeals, the appellants accepted duty liability but claimed a mistake in the calculation of the duty amount due to an error in the price list used. The SDR did not object to sending the matter back to the adjudicating authority for correction. Upon reviewing the case, it was found that the short payment of duty by the appellants related to a specific product procured for manufacturing fertilizer. The Tribunal's previous interpretation regarding the benefit of a certain notification was overturned by the Apex Court. Following the Apex Court's decision, the appellants deposited the differential duty. There was no evidence of suppression of facts by the appellants before the Apex Court's decision, and the show cause notice did not allege such suppression. The judgment highlighted that interest on short paid duty could only be claimed if there was suppression of facts or fraud, which was not the case before the relevant amendment to Section 11AB.

The Tribunal ruled to confirm the duty demand in one appeal while setting aside the interest charge. In the other appeal, the interest charge was also set aside, and the duty confirmation was upheld pending recalculation of the correct duty amount by the adjudicating authority after hearing the appellants. The judgment concluded by disposing of the appeals accordingly.

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