TaxTMI 
TaxTMI 
TaxTMI 
2011 (6) TMI 619
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.... submitted that the demand in relation to the interest relates to the month of June 2007 while the show cause notice was issued only on 5-8-2009. Applying the principles behind Section 11A of the Central Excise Act, 1944, the ld. Advocate submitted that the normal period prescribed thereunder for initiating any action for recovery of duty if held to be applicable to such cases also, then the notice ought to have been issued within one year from June 2007 and having not done so, the claim was clearly barred by limitation. There was no allegation of suppression of facts nor was there any justification for invoking extended period of limitation. Reliance is placed in the decision of the Tribunal in the matter of C.C., Madras v. T.V.S. Whirlpool Ltd. reported in 1996 (86) E.L.T. 144 (Tribunal), while contending that the same was confirmed by the Apex Court in the matter of Commissioner v. T.V.S. Whirlpool Ltd. - 2000 (119) E.L.T. A177 (S.C.). On the other hand, the Jt. CDR submitted that for the recovery of interest, no limitation is prescribed and, therefore, applying the law laid down by the Apex Court in C.C.E., Jaipur v. Raghuvar (India) Ltd. reported in 2000 (118) E.L.T. 311 (S.C.....
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....s not intentional. The second in which the non-payment or short payment etc. of duty is "by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Act or of Rules made thereunder with intent to evade payment of duty"; that is to say, it is intentional, deliberate and/or by deceitful means. Naturally, the cases falling in the two groups lead to different consequences and are dealt with differently. Section 11A, however allow the assessees in default in both kinds of cases to make amends, subject of course to certain terms and conditions. The cases where the non-payment or short payment etc. of duty is by reason of fraud collusion etc. are dealt with under sub-section (1A) of Section 11A and the cases where the non-payment or short-payment of duty is not intentional under sub-section (2B). 10. Sub-section (2B) of Section 11A provides that the assessee in default may, before the notice issued under sub-section (1) is served on him, make payment of the unpaid duty on the basis of his own ascertainment or as ascertained by a Central Excise Officer and inform the Central Excise Officer in writing about the pa....
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....rt-paid or erroneously refunded. The Section also provides for an extended period on certain contingencies and situations. Having so observed, the Apex Court recorded that the situation in the case before the Apex Court in Raghuvar (India) case which was required to be dealt with under Rule 57-I as it stood unamended at the relevant time and, therefore, did not fall under any one of those contingencies provided for in Section 11A of the Central Excise Act. Apparently, the Apex Court was dealing with a totally different set of facts and circumstances and in that context the observations were made. The point which is sought to be raised in the case in hand is that assuming but without admitting that the principle behind Section 11A as far as the period of limitation is applicable for recovery of interest, even then the action taken was not beyond the period of limitation prescribed thereunder. In these backgrounds, the said decision would not be of much help to the respondent. 8. The DR has placed reliance in the decision of the Bombay High Court in the case of CCE & C, Aurangabad v. Padmashri V.V. Patil S.S.K. Ltd. reported in 2007 (215) E.L.T. 23 (Bom.). The Bombay High Court....
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....The question then arises whether payment of duty before issuance of show cause notice exempts the assessee from liability to pay interest u/s. 11AB. Learned Counsel Shri Kolte had placed reliance upon concluding para in the judgment of CESTAT Bangalore in the matter of Rashtriya Ispat Nigam Ltd. v. Commissioner of Central Excise, Visakhapatnam, which reads thus : "In these circumstances, there is no justification on the part of the department to impose penalty u/s. 11AC as well as under Rule 173Q of the Central Excise Rules, 1944. Consequentially, no interest also is payable." In the matter, penalty u/s. 11AC is held non-imposable because the amount of duty was paid before issuance of show cause notice. The observation "consequentially no interest is also payable", according to Advocate Shri Kolte, was confirmed by the Hon'ble the Supreme Court while dismissing the appeal of the department. First of all, with due respect, it must be said that on going through the entire judgment of the Tribunal at Bangalore, there does not appear any submissions advanced regarding the issue of interest. The stray reference to interest has come in the judgment of the Tribunal unsupported by any re....
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.... Central Excise Officer. The show cause notice and determination can go on if the short duty is not paid, but even if short duty is paid by taking liberty under sub-section (2B), we are afraid, that does not absolve the assessee from the liability to pay interest thereon. In case by proceeding with the show cause notice, if the Central Excise Officer determines short duty payable higher than as ascertained and paid by the assessee himself, the assessee would be liable to pay interest u/s. 11AB upon the same. Emphasis by Advocate Shri Kolte was on the tail piece of sub-section (2B). According to him, once the short duty is paid before issuance of show cause notice, the department is prohibited from issuing show cause notice and, therefore, there cannot be any adjudication u/s. 11A(1) and (2) and, therefore, there cannot be any imposition of either interest u/s. 11AB or penalty u/s. 11AC. We quote the tail piece, relied upon by Advocate Shri Kolte : ".................On receipt of such information (regarding payment under sub-section (2B) shall not serve any notice under sub-section (1) in respect of duty so paid." We are afraid, the proceedings starting with the show cause notice....
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....vant date for demand of duty would be date on which goods were allowed clearance from the Warehouse as the interest is required to be paid till the date of clearance in terms of Rule 61(3) of the Customs Act, 1962. The department recovered at the time of clearance the duty as well as interest as held payable at that time and cancelled the bonds. Taking into consideration the relevant date the demand have been clearly raised much after the period of six months. The Appeals of the Revenue are therefore dismissed." 10. Being dissatisfied, the department had carried the matter in appeal before the Apex Court in TVS case. However, the appeal was dismissed with the following observations :- "It is only reasonable that the period of limitation that applies to a claim for the principal amount should also apply to the claim for interest thereon. We find no merit in the appeals and they are dismissed with costs". 11. As already observed above in Padmashri V.V. Patil S.S.K. case, the Bombay High Court while dealing with the issue of interest payable in terms of Section 11AB of the said Act has clearly held that even if the assessee pays the short duty by virtue of liberty granted....