Interest on delayed excise duty remains recoverable despite pre-notice payment, and no duty-demand limitation applies to interest recovery.

Interest under Section 11AB of the Central Excise Act remained payable on differential duty arising from retrospective price escalation, even though the short duty was paid through supplementary invoices and before issuance of show cause notice. Payment of duty under Section 11A(2B) did not extinguish liability to interest because the duty had been paid belatedly. In the absence of a specific statutory limitation for recovery of interest, the limitation period applicable to duty demands under Section 11A could not be imported. The demand for interest was therefore held not barred by limitation, and the assessee's challenge failed.

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Issues: Whether interest under Section 11AB of the Central Excise Act, 1944 on differential duty paid through supplementary invoices was recoverable, and whether the demand for such interest was barred by limitation.

Analysis: The demand related to differential duty arising from retrospective price escalation, and the Court applied the principle that interest under Section 11AB is payable on delayed payment of duty even where the short duty is paid under Section 11A(2B). The Court relied on the statutory scheme and prior authority to hold that payment of duty before show cause notice does not absolve liability to interest. It further held that, in the absence of any specific limitation for recovery of interest, the action could not be defeated by importing the limitation period applicable to duty demands under Section 11A. The recovery had in any event been initiated within a reasonable period.

Conclusion: The demand for interest was not barred by limitation and the assessee remained liable to pay interest under Section 11AB. The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The appeal failed, and the confirmation of interest liability was sustained.

Ratio Decidendi: Interest on delayed payment of excise duty is recoverable even where the differential duty is paid through supplementary invoices or before show cause notice, and in the absence of a specific statutory limitation for interest recovery, courts will not import the limitation period prescribed for duty demands.

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