2011 (8) TMI 1131 - AT - Central Excise

Tribunal Upholds Appellate Order on Duty Payment Interest, Emphasizes Timely Revenue Payment

The Tribunal confirmed the first appellate order, dismissing the appeal and holding the appellant liable for interest on defaulted duty payment. The ... - Issues Involved:The issues involved in the judgment are determination of interest on duty payable, applicability of Rule 57-I (3) of Central Excise Rules 1944, and the liability of the appellant for interest on defaulted duty payment.Determination of Interest on Duty Payable:The appellant argued that the interest calculated in Annexure A to the show cause notice is not leviable on them as the liability arose only on the day the appeal was finally decided. The appellant contended that Rule 57-I (3) of Central Excise Rules 1944 was not prevalent when the show cause notice was issued, making the demand unenforceable against them.Applicability of Rule 57-I (3) of Central Excise Rules 1944:The Departmental Representative supported the first appellate order, stating that interest on duty becomes due from the date of default till the payment to the Government. Referring to a Tribunal decision and the Apex Court decision in Escape India Ltd. case, it was argued that the manner in which interest is levied was correct.Liability of the Appellant for Interest on Defaulted Duty Payment:After hearing both sides and examining the records, the Tribunal found an admitted default in the case where duty was not paid on the due date. The Tribunal emphasized that the right to interest follows the right to restoration, as per Section 11AA of the Central Excise Act, 1944. The Tribunal highlighted the importance of timely payment of public revenue for public welfare and confirmed the first appellate order, dismissing the appeal.[Dictated & Pronounced in the open Court].