Tribunal sets aside excessive interest rates, directs payment at specified rates.

The tribunal held that interest rates higher than those specified under Section 11AB cannot be imposed through subordinate rules. The order demanding interest exceeding the prescribed rates was set aside, directing the appellants to pay interest at the specified rates within four weeks. The appeal was allowed, and the stay petition was also granted.

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Issues:
1. Discrepancy in the rate of interest for delay in payment of duty under Section 11AB and Rule 8(3) of the Central Excise Rule, 2002.
2. Validity of Rule 8(3) in prescribing a higher rate of interest than Section 11AB for default in payment of duty.

Analysis:
1. The appellant argued that the authorities demanded interest at 24% for delay in payment of duty, contrary to the prescribed rates of 15% and 13% under Section 11AB for different periods. Citing previous decisions, the appellant contended that Rule 8(3) prescribing a higher rate of interest was ultra vires.

2. The JCDR representing the respondent contended that Section 11AB applies to delay in payment, while Rule 8(3) addresses default in payment of duty. Therefore, both provisions should be considered valid as they cater to distinct situations.

3. The tribunal found that default in payment of duty results in a delay in payment, making the situations interconnected. Relying on previous judicial decisions, the tribunal held that interest rates higher than those specified under Section 11AB cannot be imposed through subordinate rules. Consequently, the tribunal set aside the order demanding interest exceeding the prescribed rates, directing the appellants to pay interest at the specified rates within four weeks. The appeal was allowed, and the stay petition was also granted.

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