Tribunal sets aside interest demand, upholds penalty. Appeal partly allowed. The Tribunal set aside the demand of interest under Section 11AB for the period in question as the provision was not in effect then. The penalty of Rs. ...
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The Tribunal set aside the demand of interest under Section 11AB for the period in question as the provision was not in effect then. The penalty of Rs. 1,000 imposed on the appellants was upheld as uncontested. The appeal was partly allowed based on these findings.
Issues: 1. Demand of interest under Section 11AB for the period from October '97 to July '99. 2. Imposition of a penalty of Rs. 1,000 on the appellants.
Analysis:
Issue 1: Demand of Interest under Section 11AB The Tribunal had earlier ordered the appellants to reverse the proportionate credit in respect of DM water used in the steam supplied to their sister concern. The appellants paid the entire amount of credit taken on DM water, amounting to Rs. 2,33,730. In the current appeal, the appellants contested the demand of interest on this amount. The Ld. Advocate argued that Section 11AB, under which interest was demanded, was not in effect during the period in question. The Tribunal noted that there was no evidence of fraud, collusion, or willful suppression, and the demand notices were issued without invoking the extended period of limitation. Consequently, the demand of interest in the second round of proceedings was deemed unjustified and set aside.
Issue 2: Imposition of Penalty The Ld. Advocate did not contest the small penalty of Rs. 1,000 imposed on the appellants. The Tribunal upheld the imposition of this penalty, as there was no challenge to it. The penalty was deemed appropriate despite the appeal being partly allowed on the grounds of interest demand. Therefore, the imposition of the penalty was upheld, and the appeal was partly allowed based on this issue.
In conclusion, the Tribunal set aside the demand of interest under Section 11AB for the period in question as the provision was not in effect during that time. The imposition of the penalty of Rs. 1,000 was upheld, as it was not contested by the appellants. The appeal was partly allowed based on these findings.
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