Court rejects revenue's appeal on interest demand under Sec. 11AB of Excise Act, citing timely duty payment.

The appeal filed by the revenue against the demand of interest from the respondents under Sec. 11AB of the Central Excise Act, 1944 was rejected by the IHCS. The court upheld the previous judgment in favor of the respondent, emphasizing that as there was no time gap between learning about the revised rates and paying the duty, interest was not applicable. The voluntary payment of duty upon discovering the revised rates did not constitute non-payment or short-payment of excise duty, leading to the dismissal of the appeal.

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Issues:
Demand of interest under Sec. 11AB of Central Excise Act, 1944.

Analysis:
The appeal was filed by the revenue against the order-in-appeal regarding the demand of interest from the respondents under Sec. 11AB of the Central Excise Act, 1944. The issue revolved around the payment of differential duty by the respondent due to a revision of prices after the original clearance of steel forgings and motor vehicle parts. The revenue contended that interest was payable as the original clearance should have been done on the revised price. However, it was noted that there was no time gap between the issuance of supplementary invoices and the revision of prices. This issue had already been settled in favor of the respondent in a judgment of the Hon'ble High Court of Bombay. The judgment highlighted that if there was a time gap between learning about the revised rates and paying the duty, interest would be applicable. However, in this case, the duty was voluntarily paid upon learning about the revised rates, with no delay in payment. It was clarified that this was not a case of non-payment or short-payment of excise duty. The judgment concurred with the view taken by the Commissioner (Appeals) and the CESTAT, leading to the dismissal of the appeal by the IHCS.

Therefore, considering that the issue had already been settled by a previous judgment and in light of the absence of any time gap between the revision of prices and the payment of duty, the appeal filed by the revenue was rejected. The judgment emphasized that the voluntary payment of the duty upon learning about the revised rates did not warrant the imposition of interest under Sec. 11AB of the Central Excise Act, 1944.

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