2016 (1) TMI 338 - AT - Central Excise

Tribunal upholds Revenue's appeal on interest liability under Central Excise Act 1944

The Tribunal allowed the Revenue's appeal, upholding interest liability under section 11AB of the Central Excise Act 1944 from 28/9/1996 onwards. The ... Demand of interest - Misdeclaration of goods - Imposition of penalty - Held that:- The respondent is not in appeal against the impugned order and has discharged the Central Excise duty confirmed by the adjudicating authority. We find merits in the submissions made by the learned departmental representative as to the interest liability arises when the demand is confirmed. We find that the show cause notice seeks to impose interest under provisions of section 11AB of the Central Excise Act 1944 and the adjudicating authority has also imposed the interest under the same section - provisions of Section 11AB came into the statute from 28 September 1996. Any interest liability on the amount of duty for the period prior to 28/09/1996 does not arise, is the law settled by the Apex Court. Respectfully following the same, in the case in hand, any interest liability prior to 28/9/96 is not liable to be imposed - Decided against Revenue. Issues:Interest liability under section 11AB of the Central Excise Act 1944.Analysis:Issue 1: Interest liability under section 11AB of the Central Excise Act 1944The appeal was filed by the Revenue against the setting aside of interest levied by the adjudicating authority without reasoning by the first appellate authority. The Departmental representative argued that the respondent had cleared goods by mis-declaring and evading Central Excise duty during 1993-94 to 1998-99. While the duty and penalty were upheld, the interest was not. The Tribunal noted that the interest liability arises when the demand is confirmed under section 11AB of the Act. It was found that interest for the period prior to 28/09/1996 was not liable to be imposed based on the settled law by the Apex Court. However, interest liability from 28/9/1996 was confirmed since the duty was not paid during that period. Therefore, the impugned order was set aside, and the appeal by the Revenue was allowed on this issue.In conclusion, the Tribunal upheld the interest liability under section 11AB of the Central Excise Act 1944 for the period from 28/9/1996 onwards, as the duty was not paid during that time. The appeal by the Revenue was allowed, setting aside the earlier decision that had not upheld the interest imposed by the adjudicating authority.