Interest on confirmed excise duty upheld, but penalty set aside where SSI exemption dispute involved bona fide brand-name interpretation.

Confirmed central excise duty attracted interest on delayed payment under Section 11AA because the assessee ed the duty liability and interest. Penalty for use of a brand name while claiming SSI exemption was found unwarranted, as the assessee could have held a bona fide view on eligibility and the issue turned on interpretation; the penalty under Rule 173Q was therefore set aside.

---

---

Issues: Whether the confirmed duty demand carried liability to pay interest, and whether penalty was sustainable where the assessee had used a brand name while claiming SSI exemption.

Analysis: The assessee accepted the duty liability and interest for delayed payment. The confirmed demand was therefore maintained along with liability to pay interest under Section 11AA of the Central Excise Act, 1944. On penalty, the dispute concerned use of brand name and eligibility to SSI benefit. The assessee could have entertained a bona fide belief about eligibility, and the matter turned on interpretation. In these circumstances, penalty under Rule 173Q of the Central Excise Rules, 1944 was held to be unwarranted.

Conclusion: The duty demand was confirmed with interest, but the penalty was set aside in favour of the assessee.

---