Tribunal allows Revenue's appeal, affirms liability for interest on duty under Central Excise Act.

The tribunal set aside the impugned order and allowed the appeal of the Revenue, affirming the liability of the respondents to pay interest on duty under Section 11AA of the Central Excise Act. The tribunal found support for this decision in the case law of Easwaran & Sons Engineers Ltd. v. CCE, Chennai, establishing that interest on duty is leviable from the date immediately succeeding the expiry of three months from the provision's enactment until the date of duty payment.

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Issues: Liability to pay interest on duty under Section 11AA of the Central Excise Act.

Analysis:
1. Background and Question for Consideration:
In this case, the central issue revolves around determining the liability of the respondents to pay interest on duty under Section 11AA of the Central Excise Act. The department had confirmed a demand for duty dating back to 1981, which was eventually upheld by higher appellate authorities, including the apex court's decision against the assessee on 12-12-1996. Subsequently, the assessee paid the duty in two installments on 10-2-97 and 10-3-97. The department then demanded interest on duty under Section 11AA, leading to a contested adjudication where the original authority confirmed the interest demand, prompting the appeal by the aggrieved party.

2. Judicial Analysis and Decision:
Upon hearing arguments from both sides, the tribunal found no merit in the objections raised by the respondents' counsel. Instead, the tribunal found support for the appellant's position in the case law of Easwaran & Sons Engineers Ltd. v. CCE, Chennai, 2007 (208) E.L.T. 312 (Tri.-Chennai). This case established that interest on duty is leviable under Section 11AA of the Central Excise Act from the date immediately succeeding the expiry of three months from the provision's enactment until the date of duty payment. Drawing parallels with this precedent, the tribunal concluded that the interest on duty is indeed payable as per Section 11AA.

3. Final Decision:
Consequently, the tribunal set aside the impugned order and allowed the appeal of the Revenue. The judgment was pronounced in open court, affirming the liability of the respondents to pay interest on duty as per the provisions of Section 11AA of the Central Excise Act.

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