Manufacturers' appeal on excise duty interest rejected due to non-payment notice.

The Tribunal rejected the appeal filed by the manufacturers of excisable goods, holding that interest under Section 11AB of the Central Excise Act was payable without a separate notice. The Tribunal found that the short-payment of excise duty was due to suppression of value, and interest should have been paid along with the duty payment. Citing legal developments and precedents, the Tribunal concluded that the demand for interest was not time-barred, and upheld the Revenue's decision to demand interest for the unpaid amount.

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Issues:
Short-payment of excise duty, demand for interest under Section 11AB, time-barred demand for interest, suppression of value, payment of interest without separate show-cause notice, reasonable time period for recovery of interest.

Analysis:
The case involves the appellants, manufacturers of excisable goods, who sold or transferred goods to their subsidiary company at an incorrect value for excise duty payment. Upon audit, a differential duty of Rs.9,17,914/- was identified and paid by the appellants on 2.1.2009. However, no interest under Section 11AB of the Central Excise Act, 1944 was paid on this amount. Subsequently, the Revenue issued a show-cause notice on 17.7.2009, demanding interest of Rs.1,36,044/- under Section 11AB for the unpaid interest.

The consultant for the appellant argued that the demand for interest made in July 2009 is partly time-barred as the short-payment occurred during 2007-08. Citing the decision in CCE Vs. TVS Whirlpool Ltd., it was contended that the limitation period for the principal amount should also apply to the interest claim, and since no suppression was invoked in the notice, relief should be granted for the time-barred portion of the demand.

On the other hand, the Revenue contended that the short-payment was due to suppression of value, and when the duty was voluntarily paid, interest should also have been paid without the need for a separate notice. Referring to decisions like CCE Vs. SKF Ltd and CCE Vs. International Auto Ltd, the Revenue argued that the Tribunal has consistently held that a reasonable time period, such as six months after payment of duty, is acceptable for seeking interest recovery. Various precedents were cited to support this argument.

The Tribunal examined the legal position post-amendments to the Central Excise Act by Acts 14 of 2001 and 32 of 2003. Referring to the decision in the case of International Auto Ltd, the Tribunal concluded that the assessee should pay interest even without a separate notice. Considering the precedents and legal developments, the Tribunal found no merit in the appeal filed by the assessee and consequently rejected the appeal.

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