2015 (3) TMI 1099

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....confirmed the demand of Rs. 19,34,306/- and also appropriated the entire amount already paid. He also imposed penalty of Rs. 10,000/- under Rule 25 of Central Excise Rules, 2001 red with Section 11AC of the Central Excise Act, 1994 along with interest under Section 11AB. The respondents preferred appeal before the Commissioner (Appeals) against imposition of penalty and levy of interest. Commissioner (Appeals) allowed the appeal of the respondents and set aside both interest and penalty. The said order was reviewed by the Department and Revenue has filed this present appeal against setting aside of interest demanded under Section 11AB of the Act. 3. The learned AR for Revenue reiterates the grounds of appeal and submits that the period of ....

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....demand of interest under Section 11AB which was confirmed by the adjudicating authority where the lower appellate authority has set aside the interest. So Revenue has preferred appeal only against setting aside of interest demanded under Section 11AB of the Act. On perusal of the adjudication order and the records, the demand of duty has been confirmed for the clandestine removal of the goods for the period 2001 to June 2003. The investigating authorities have clearly brought out the clandestine removal aspect and the case was detected on 29.7.2003 itself and the respondents paid the entire duty during the investigation itself i.e. between 2.8.2003 and 17.1.2005 on various dates. The adjudicating authority in his order dated 14.6.2005 has c....

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....tates where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person who has paid the duty under sub-section (2B) of Section 11A, shall, in addition to the duty, be liable to pay interest .......It is thus to be seen that unlike penalty that, is attracted to the category of cases 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', under the scheme of the four Sections (11A, 11AA, 11AB & 11AC) interest is leviable on delayed or deferred payment of duty for whatever reason....

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....ase was quite different, Section 11AB (1) was not at all applicable, and therefore, the Assessee was not required to pay interest." 13. It further held that a case of this nature would not fall in the category where duty of excise was not paid or short-paid. 14. We are unable to subscribe to the view taken by the High Court. It is to be noted that: the assessee was able to demand from its customers the balance of the higher prices by virtue of retrospective revision of the prices. It, therefore, follows that at the time of sale the goods carried a higher value and those were cleared on short payment of duty. The differential duty was paid only later when the assessee issued supplementary invoices to its customers demanding the balance a....