Interest on differential excise duty not payable where additional duty arose only from later price revision and was paid before notice.

Interest under Section 11AB of the Central Excise Act was held inapplicable where the assessee had paid duty on the value known at the time of clearance and later discharged only the differential duty arising from a subsequent price revision before any show cause notice. On those facts, the additional amount did not constitute short levy or short payment in the statutory sense, and the conditions for invoking Section 11A(2) or Section 11A(2B) were not satisfied. The assessee was therefore not liable for the demanded interest.

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Issues: Whether interest under Section 11AB of the Central Excise Act, 1944 was payable on differential duty discharged before issuance of the show cause notice, when the additional duty arose only on account of later price revision.

Analysis: Interest under Section 11AB was attracted, for the relevant period, only where duty had not been levied, had not been paid, had been short levied, short paid, or erroneously refunded, and the duty had been determined under Section 11A(2) or paid under Section 11A(2B). The duty in question had already been paid on the value known at the time of clearance, and the later differential payment arose only because of subsequent revision of prices. On those facts, there was no short levy or short payment in the sense contemplated by the statute, and the conditions for invoking Section 11A(2) or Section 11A(2B) were not satisfied.

Conclusion: Interest was not payable on the differential duty, and the assessee was not liable to pay the demanded interest.

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