Limitation for interest on delayed excise duty bars late demand when facts were already within departmental knowledge

A claim for interest on delayed excise duty payment, where the relevant facts were already reflected in statutory returns and known to the department, was treated as subject to the one-year limitation period under section 11A of the Central Excise Act, 1944. Applying its earlier identical ruling, the Court held that a notice issued after expiry of that period could not be sustained, and the department lacked jurisdiction to raise the demand once limitation had run. The demand for interest was therefore barred by limitation, with the question of law decided in favour of the assessee.

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Issues: Whether a show cause notice issued for recovery of interest on delayed payment of excise duty, after expiry of one year, was time-barred under the statutory limitation applicable to demands under the Central Excise Act, 1944.

Analysis: The issue was held to be covered by the Court's earlier decision in an identical matter, where it was ruled that when differential duty is regularly reflected in statutory returns and the department is aware of the relevant facts, a notice seeking interest for delayed payment must also be issued within the limitation period prescribed under section 11A. The Court treated the claim for interest as governed by the same one-year limitation and found that the department had no jurisdiction to raise the demand after expiry of that period.

Conclusion: The demand of interest was held to be barred by limitation and the question of law was answered in favour of the assessee and against the revenue.

Ratio Decidendi: A claim for interest on delayed excise duty payment, where the relevant facts are already within the department's knowledge, is subject to the limitation period prescribed for demands under section 11A of the Central Excise Act, 1944.

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