Appellate Tribunal sets aside interest under Section 11AB, upholds duty demand

The Appellate Tribunal CESTAT AHMEDABAD accepted the appellant's argument that interest under Section 11AB of the Central Excise Act, 1944 should be set aside since there was no fraud or mis-declaration. The Tribunal modified the order to specify that duty demand was upheld, but interest demanded under Section 11AB was set aside. The penalty was also set aside. The judgment highlighted the importance of aligning with statutory provisions and factual accuracy in determining interest liability under the Central Excise Act, 1944.

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Issues: Rectification of mistake in the final order regarding interest liability under Section 11AB of Central Excise Act, 1944.

In this judgment by the Appellate Tribunal CESTAT AHMEDABAD, the issue revolved around the rectification of a mistake in the final order regarding the liability of interest under Section 11AB of the Central Excise Act, 1944. The Tribunal had earlier set aside the penalty but did not specify whether interest was liable to be paid. The appellant contended that since there was no fraud or mis-declaration in the case, interest under Section 11AB should also be set aside. The appellant argued that during the material period from 6-5-1996 to 28-5-2000, the provisions of Section 11AB could only be invoked in cases of duty not paid due to fraud, suppression, or wilful misstatement with an intent to evade duty. The appellant highlighted that the bond executed during importation did not mention interest payable, and the relevant notification also did not have specific conditions for interest collection.

The Tribunal found the submissions made by the appellant's counsel to be both statutorily and factually correct. Therefore, the argument presented by the counsel that interest should be set aside was accepted. Consequently, the Tribunal modified the order by substituting the last sentences to specify that duty demand against the appellant was upheld, but the interest demanded under Section 11AB of the Central Excise Act, 1944, was set aside. The penalty was also set aside in light of these findings. The judgment emphasized the importance of aligning with statutory provisions and factual accuracy in determining the liability of interest under the Central Excise Act, 1944.

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