Statutory interest rate prevails over notification-based rate; amendment treated as clarificatory and retrospective.

Interest on duty-related amounts was governed by Section 11AB of the Central Excise Act, 1944, because the statutory rate prevails over a higher rate fixed by notification under Rule 19 of the Central Excise Rules, 2002. The notification prescribing 24% interest was therefore not enforceable to the extent it conflicted with the Act, and the assessee was entitled only to the statutory rate of 15%. The amending Notification No. 20/07, which substituted the reference to Section 11AB for the 24% figure, was treated as clarificatory and retrospective, aligning the notification with the governing statutory provision.

---

---

Issues: Whether interest was payable at 24% under Notification No. 42/2001 or at 15% under Section 11AB of the Central Excise Act, 1944, and whether the amending Notification No. 20/07 operated retrospectively.

Analysis: The applicable rate of interest was held to be that prescribed by Section 11AB of the Central Excise Act, 1944, since the statutory provision prevails over the rate fixed by notification issued under Rule 19 of the Central Excise Rules, 2002. The amendment made by Notification No. 20/07, substituting the reference to the rate of interest under Section 11AB of the Act in place of 24%, was treated as clarificatory and retrospective in effect, following the principle that such substitution aligns the notification with the governing statutory rate.

Conclusion: The demand based on 24% interest was unsustainable, and the assessee was entitled to the statutory rate under Section 11AB of the Central Excise Act, 1944.

---