Limitation for interest on differential duty follows the duty recovery period, making delayed notices time-barred absent suppression.

Interest sought under Section 11AB of the Central Excise Act on differential duty arising from supplementary invoices issued after retrospective price revision was held to be subject to the same limitation rules as recovery of the principal duty. The Tribunal applied Section 11A limitation to recovery of interest as well, and found the notices time-barred because they were issued beyond the normal period. In the absence of fraud, collusion, suppression, or intent to evade duty, the extended limitation period could not be invoked. The interest demand was therefore barred by limitation and the appeals succeeded on that ground.

---

---

Issues: Whether interest demanded on differential duty paid through supplementary invoices due to retrospective price revision was barred by limitation.

Analysis: The demand related to interest under Section 11AB of the Central Excise Act, 1944 on differential duty arising from supplementary invoices issued after price escalation. The Tribunal accepted that the substantive liability to pay interest stood settled against the assessee, but examined whether the notices were within time. Relying on the settled principle that the limitation applicable to recovery of the principal amount also governs recovery of interest, and following earlier decisions on this point, it held that the period prescribed under Section 11A of the Central Excise Act, 1944 applies to recovery of interest as well. The notices having been issued beyond the normal period, and no fraud, collusion, suppression, or intent to evade duty being established, the extended period could not be invoked.

Conclusion: The demand of interest was held to be barred by limitation and the appeals were allowed on that ground.

Final Conclusion: The assessee succeeded on the limitation issue, while the underlying liability on merits was not accepted in its favour.

Ratio Decidendi: Where interest is sought to be recovered on differential duty arising from supplementary invoices, the same limitation principles applicable to recovery of the principal duty apply, and in the absence of fraud, suppression, or other grounds for extension, a notice issued beyond the normal period is time-barred.

---