2009 (9) TMI 781

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....unt was paid by the appellant only in the year 2004 during the months of April and May, 2004. The amount was paid partly by utilizing the cenvat credit which was available and the balance amount of Rs. 2,91,305/- was paid in cash. It is at this stage that the deptt. demanded interest on this amount under the provision of Section 11AA. In this regard the jurisdictional Superintendent vide letter dated 28-12-05 which had been preceded by long correspondence, directed the appellant to pay the interest under Section 11AA on the entire amount of Rs. 5,07,738/- which had become due from the date of expiry of 3 months from the date of the adjudication order confirming the Cenvat credit demand. The appellant filed an appeal to Commissioner (Appeals....

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....s of section 11AA are not applicable for Modvat credit. (4) The Cenvat credit demand in this case pertains to July, August and September, 1994 while Section 11AA had been introduced w.e.f. 26-5-95. Tribunal in the case of Komal Straw Board & Mill Board Inds. v. CCE, Ludhiana reported in 2005 (186) E.L.T. 584 (Tri.-Del.) has held that interest under Section 11AA of Central Excise Act, 1944 cannot be charged in respect of demands pertaining to the period when such provisions were not there in the statute book. (5) The appellant had unutilized credit amounting to about Rs. 2,17,789/- in their Modvat account since 1995 and since their unit was closed and this credit was unutilized at the time of payment of Cenvat credit demand amount of Rs. 2....

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....ly in April and May, 2004. The point of dispute is as to whether the interest under Section 11AA would be chargeable on this amount or not and if it is chargeable, whether it would be chargeable on the entire amount or only on the amount paid in cash. 4. Section 11AA providing for charging of interest at notified rate on the duty confirmed under Section 11A(2), but which was not paid, had been introduced in the Central Excise Act, 1944 w.e.f. 26-5-95 and it provided that if the duty demand confirmed under Section 11A(2) is not paid within a period of 3 months from the date of confirmation of the demand, interest at the notified rate will be payable. First proviso to Section 11AA provides that where a person chargeable with duty determined ....