High Court rules interest on delayed excise duty payable even if duty paid before notice. Emphasizes Section 11AB. Remands case for review.

The High Court overturned the Tribunal's decision, ruling that interest on delayed excise duty is payable even if duty was paid before the show cause notice. The Court emphasized the applicability of interest under Section 11AB, stating it is charged for revenue loss and to correct the value of goods. While setting aside the previous judgment, the Court remanded the case to the Tribunal for a fresh review. Additionally, the Court directed the Tribunal to reconsider the issue of penalty imposition, partially allowing the appeal and emphasizing the obligation to pay interest as demanded by the Revenue.

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Issues:
1. Challenge to order passed by Tribunal regarding payment of interest on delayed excise duty.
2. Interpretation of Section 11A and Section 11AB of the Central Excise Act.
3. Reconsideration of penalty imposition by the Tribunal.

Analysis:
1. The High Court heard an appeal challenging the Tribunal's order stating that an assessee is not liable to pay interest on delayed excise duty if duty was paid before the show cause notice was issued, based on a previous judgment. The Revenue appealed to the Apex Court citing the Union of India v. Rajasthan Spinning & Weaving Mills case, which clarified that interest is still applicable even if duty is paid before notice. Following this, the High Court set aside the previous judgment and remanded the case to the Tribunal for a fresh review.

2. The High Court referred to the law laid down by the Apex Court and its own judgment in a previous case to explain the leviability of interest on delayed or deferred payment of duty. It highlighted that Sub-section (2B) of Section 11A allows the assessee to pay unpaid duty before notice issuance, but such payment does not exempt them from interest under Section 11AB. The court emphasized that interest is charged for revenue loss, even if the non-payment was unintentional, and it is applicable to correct the value of goods at the time of removal.

3. The High Court overturned the Tribunal's decision regarding interest payment, emphasizing that interest is indeed payable as demanded by the Revenue. However, the Court noted that the Tribunal did not address the imposition of penalty. Therefore, it directed the Tribunal to reconsider the penalty imposition issue. Consequently, the Court partially allowed the appeal, reversing the finding that no interest was payable, and remanded the penalty decision back to the Tribunal for fresh consideration.

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