Tribunal Upholds Central Excise Duty Demand, Exemption Invalid. Interest Payable from 11-5-2001.

The Tribunal upheld the demand for Central Excise duty from the appellant, ruling that the exemption claimed was invalid. The Principle of Estoppel was deemed inapplicable to fiscal statutes, and duty must be paid unless exempted by a valid notification. However, the Tribunal agreed with the appellant that interest could not be demanded for duty payable before the Finance Bill, 2001 received the President's assent. Interest was only held payable from 11-5-2001 onwards. The appeal was disposed of with this decision.

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Issues:
- Whether Central Excise duty and interest are demandable from the appellant.

Analysis:
The appeal involved the question of whether the appellant, a manufacturer of electrical insulators, was liable to pay Central Excise duty and interest. The appellant argued that they had cleared goods without duty payment based on certificates exempting them under Notification No. 108/95-C.E. The certificates were issued by project authorities and the jurisdictional Deputy Commissioner. The appellant contended that they should not be held liable for duty as they acted in good faith based on the certificates and permissions obtained. However, it was noted that the Japan Bank for International Cooperation was not approved as an international organization by the Government of India, rendering the exemption under the notification inapplicable. The Tribunal held that the Principle of Estoppel does not apply to fiscal statutes, and duty must be paid unless exempted by a valid notification. The Commissioner had dropped the demand for duty for a certain period and did not impose any penalty on the appellants. Therefore, the Tribunal upheld the demand for duty as confirmed by the Commissioner.

Regarding the question of interest, the appellant argued that interest could not be demanded under Section 11AB of the Central Excise Act for duty payable before the Finance Bill, 2001 received the President's assent on 11-5-2001. The Tribunal agreed with this argument, citing sub-section (2) of Section 11AB, which exempts interest on duty payable before the Finance Bill's assent date. As a result, the Tribunal held that no interest was demandable from the appellants for the period before 11-5-2001. However, the appellants were held liable to pay interest on duty payable from 11-5-2001 onwards. Consequently, the appeal was disposed of with this determination.

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