Interest liability on voluntary differential duty payment under central excise remains payable despite self-assessment and later good-faith payment.

Interest under Section 11AB of the Central Excise Act remains payable where short-paid duty is later discharged by the assessee on its own ascertainment under Section 11A(2B). The statutory scheme, including Explanation II to Section 11A(2B), preserves the interest liability despite voluntary payment before notice. Because the goods were cleared on provisional price and the assessee knew the duty could vary on finalisation, the subsequent making good of differential duty did not extinguish statutory interest. Authorities relied on to deny interest were distinguished on their facts and legal context.

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Issues: Whether interest under Section 11AB of the Central Excise Act, 1944 is payable on differential duty voluntarily paid by the assessee on its own ascertainment under Section 11A(2B) of the Central Excise Act, 1944.

Analysis: The statutory scheme of Section 11A(2B) and its Explanation II makes it clear that where duty has been short-paid and the assessee pays the amount on its own ascertainment before notice, the liability to pay interest under Section 11AB still arises. The assessee had cleared goods on provisional price and was aware that the duty liability could vary on finalisation of accounts. The short-paid duty was made good later, but that does not displace the statutory interest liability. The authorities cited for the proposition that no interest was payable were found inapplicable because they dealt with different factual and legal situations.

Conclusion: Interest under Section 11AB is payable on the differential duty paid by the assessee under Section 11A(2B), and the demand was rightly upheld against the assessee.

Ratio Decidendi: Section 11AB applies to duty short-paid and later paid on the assessee's own ascertainment under Section 11A(2B), and such voluntary payment does not extinguish liability to interest.

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