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of <h1>High Court directs Tribunal to hear appeal on merits, upholds interest demand under Section 11AA.</h1> <h3>Tamilnadu Asbestos (Pipes) Versus Commissioner of Central Excise, Tirichirapalli</h3> Tamilnadu Asbestos (Pipes) Versus Commissioner of Central Excise, Tirichirapalli - TMI Issues:- Appeal against Commissioner (Appeals) order regarding demand of interest under Section 11AA of the Central Excise Act.Analysis:1. The case involved an appeal where the Hon'ble High Court directed the Tribunal to hear the appeal on merits after setting aside the previous order due to COD clearance issues.2. The appellant contested the demand of interest under Section 11AA related to availed modvat credit on inputs and capital goods during 1995-1999.3. The Department issued a fresh SCN demanding interest on the amount already paid by the appellant, which was confirmed by the adjudicating authority and Commissioner (Appeals).4. The appellant argued that interest cannot be demanded under Section 11AA as the recovery of irregular credit was made under CCR, not Section 11A, and cited relevant case laws.5. The Respondent contended that non-payment of duty due to disallowed credit justifies invoking Section 11AA for interest recovery without a time limit.6. The Tribunal found the demand of interest under Section 11AA sustainable as the recovery of irregular credit under CCR falls within the purview of Section 11AA as per Rule 57I and 57U of CER.7. It was established that interest becomes automatic once the demand is confirmed and upheld by the higher Appellate Forum, without requiring a separate notice.8. The clear and unambiguous language of Rule 57I (3) and 57U (8) of CER mandates the payment of interest after a specified period, leaving no discretion to the appellant.9. The Tribunal referred to a High Court judgment emphasizing that interest under Section 11AA is a civil liability, compulsory for the assessee who retained government dues, irrespective of mala fide intent.10. Following the legal precedents and the mandatory nature of interest payment under Section 11AA, the Tribunal upheld the demand for interest on the confirmed amount, paid belatedly after the Tribunal's order.This detailed analysis of the legal judgment showcases the arguments presented by both parties, the application of relevant legal provisions, and the Tribunal's decision based on established legal principles and precedents.
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