Interest under Central Excise law requires prior duty determination and delayed non-payment; demand fails where those conditions are absent.

Interest under Section 11AA of the Central Excise Act, 1944 is recoverable only where duty has first been determined under Section 11A(2) and remains unpaid beyond the prescribed period. On the facts described, the demand was not shown to have been determined under Section 11A(2), and the duty was paid within three months of the Supreme Court's determination. The Revenue's reliance on restitution and erroneous refund authorities was held inapplicable. Accordingly, the interest demand was unsustainable and the assessee was not liable to pay the impugned interest.

---

---

Issues: Whether interest under Section 11AA of the Central Excise Act, 1944 was recoverable on the duty paid by the appellant after the Supreme Court's decision, and whether the duty could be treated as determined under Section 11A(2) of the Central Excise Act, 1944 for the purpose of charging such interest.

Analysis: Section 11AA applies only where duty has been determined under Section 11A(2) and remains unpaid beyond the prescribed period. The show cause notices and the earlier adjudication orders did not establish that the demand had been determined under Section 11A(2). The record showed that the duty had been demanded under the Central Excise Rules, 1944, and the later payment was made within three months of the Supreme Court's determination. The reasoning of the Revenue based on restitution and on authorities dealing with erroneous refund was found inapplicable to the facts, because there was no prior determination under Section 11A(2) and no delay beyond the statutory period after the final determination.

Conclusion: Interest under Section 11AA was not payable on the facts of the case, and the demand of interest was unsustainable.

Final Conclusion: The appellant was not liable for the impugned interest demand, and the order confirming such demand could not stand.

Ratio Decidendi: Interest under Section 11AA of the Central Excise Act, 1944 can be levied only when duty has been determined under Section 11A(2) and remains unpaid beyond the statutory period; where such determination is absent, or the duty is paid within the prescribed time after final determination, no interest is recoverable.

---