Tribunal overturns interest and penalty on Central Excise duty default, citing Supreme Court ruling.

The Tribunal allowed the appeal, setting aside the demand for interest and penalty imposed on the appellants for defaulting in discharging duty liability under the Central Excise Act. The Tribunal confirmed the duty liability but held that the imposition of interest and penalty was unsustainable based on a Supreme Court judgment. The impugned order was modified to exclude interest and penalty, providing consequential relief to the appellants.

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Issues: Duty liability, interest, penalty

Duty Liability:
The appellants, who are manufacturers of TOR steels falling under Chapter 72, defaulted in discharging their duty liability for a specific period. A show cause notice was issued demanding duty along with interest and penalty under relevant provisions of the Central Excise Act and Rules. The adjudicating authority confirmed the duty liability, interest, and imposed an equal penalty. On appeal, the Commissioner redetermined the duty payable but confirmed the interest and penalty. The appellant had already paid the duty liability and contested only the interest and penalty.

Interest and Penalty:
The appellant contested the demand of interest and penalty, citing a judgment by the Hon'ble Supreme Court in a similar case. The appellant argued that the demand of interest and imposition of penalty under the relevant provisions of the Central Excise Rules were ultra vires based on the Supreme Court's ruling. The Assistant Commissioner reiterated the findings in the impugned order.

Judgment:
The Tribunal noted that the appellant had already discharged the duty liability but disputed the demand for interest and penalty. Referring to the Supreme Court judgment cited by the appellant, the Tribunal held that the demand for interest and penalty under the Central Excise Rules was unsustainable and needed to be set aside. Consequently, the impugned order was modified to set aside the interest and penalty while confirming the duty liability. The appeal was allowed with consequential relief, if any, in the stated terms. The decision was dictated and pronounced in open court by the Member (Judicial).

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