Excise interest on differential duty recoverable as government dues; Section 11A limitation does not apply

Interest on differential excise duty arising from post-clearance price escalation was treated as a recoverable Government dues claim under Section 11 of the Central Excise Act, 1944. The Tribunal held that interest under Section 11AB, whether linked to a confirmed duty demand, a self-admitted liability, or delayed payment of self-assessed duty, is recoverable as a sum due to the Government. A show cause notice issued for such interest was regarded only as a recovery communication and not as a proceeding subject to the limitation period under Section 11A. The limitation objection was therefore rejected and the interest demand sustained.

---

---

Issues: Whether interest on differential excise duty was recoverable without applying the limitation period under Section 11A of the Central Excise Act, 1944.

Analysis: The demand related to interest on differential duty arising from price escalation after clearance of goods. The Tribunal followed the view that interest under Section 11AB, whether arising from a duty demand confirmed under Section 11A(2), a self-admitted liability under Section 11A(2B), or delayed payment of self-assessed duty under Rule 6 of the Central Excise Rules, 2002, is a sum due to the Government recoverable under Section 11 of the Central Excise Act, 1944. On that basis, the issuance of a show cause notice under Section 11A was treated only as a communication for recovery of interest and not as a proceeding subject to limitation under Section 11A.

Conclusion: The plea that the interest demand was barred by limitation was rejected, and the demand for interest was upheld.

Final Conclusion: The appeals failed on the sole substantive ground urged, as the interest demand on differential duty was held recoverable without application of Section 11A limitation.

Ratio Decidendi: Interest payable on excise duty shortfall is a government dues recovery claim under Section 11 of the Central Excise Act, 1944 and is not subject to the limitation period prescribed for duty demands under Section 11A.

---