Tribunal confirms interest demand on duty but sets aside penalty for lack of intent.

The Tribunal confirmed the demand for interest on short payment of duty under Section 11A but set aside the penalty under Section 11AC due to the absence of intent to evade duty. Previous judgments were cited to support the appellant's argument. The appeal was partly allowed, with the decision issued on 26/05/2017.

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Issues involved:
- Differential duty payment
- Interest and penalty under Section 11AC
- Applicability of previous judgments
- Confirmation of demand

Analysis:
1. Differential duty payment: The appellant cleared the input with a short payment of duty compared to the Cenvat credit availed. The demand for the differential duty was raised, along with interest and penalty under Section 11AC. The appellant argued that they had paid the differential duty along with interest before the show cause notice was issued, and the same was availed as Cenvat credit by their job worker. The appellant cited previous judgments to support their case.

2. Interest and penalty under Section 11AC: The Ld. Assistant Commissioner for the Revenue reiterated the findings of the impugned order, stating that the demand for short payment of duty, imposition of penalty, and interest was inevitable. The Tribunal examined the Order-in-original and noted that the demand was confirmed under Section 11A, with interest demanded under Section 11AB. The Tribunal differentiated the present case from the appellant's previous case, where interest was demanded under a different rule. In the current situation, once the demand for short payment of duty was confirmed under Section 11A, invoking interest under Section 11AB was deemed inevitable. The Tribunal held that the demand for interest was sustainable. However, regarding the penalty, it was noted that the demand fell within the normal period, and there was no intention of duty evasion. Therefore, the penalty under Section 11AC was set aside.

3. Applicability of previous judgments: The appellant relied on various judgments, including LG Electronics Pvt Ltd vs. Commissioner of C. Ex. Pune-III, International Auto Ltd Vs, Vako Seals Pvt Ltd Vs. CCE, Lawkim Ltd Vs CCE, CCE & ST, LTU Vs. Bill Forge Pvt. Ltd., and CCE Vs. Strategic Engg. P. Ltd. These judgments were cited to support the appellant's argument regarding the treatment of interest and penalty in cases of differential duty payment.

4. Confirmation of demand: After considering the submissions from both parties and reviewing the records, the Tribunal modified the impugned order. The Tribunal held that the demand for interest was sustainable due to the confirmed short payment of duty under Section 11A. However, the penalty under Section 11AC was set aside as there was no intention of duty evasion. The appeal was partly allowed, and the decision was pronounced in court on 26/05/2017.

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