TaxTMI 
TaxTMI 
2016 (11) TMI 1225
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.... 01-03-2005 as amended. During the course of manufacture of edible palm oil, the by-products viz: 1. Palm Fatty acid distillate, 2. Fatty acid oil, 3. RBD palm stearin are generated which are dutiable. Appellant is registered with Central Excise Department and is filing returns from time to time. 1.2 On scrutiny of ER-1 return for the month of August, 2010 during the course of audit, it was noticed that appellant defaulted payment of central excise duty to the tune of Rs. 23,97,580/- which was payable by 5th of the following month i.e. 05-09-2010 but paid the same onlt on 23-10-2010. Interest towards delay for late payment of this amount to the tune of Rs. 41,843/- was paid by appellant on 31-03-2012. 1.3 The Range Officer, Range-III,....
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....ice. 1.6 The appellant replied to the show cause notice, explaining the reason for delay in payment of duty for the month of August 2010. That appellant did not notice that the interest calculated and also pointing out an arithmetical error in calculation of interest in show cause notice for the month of June, 2011. The said show cause notice came to be adjudicated and impugned order was passed whereby the interest demand of Rs. 9,18,418/- was confirmed for contravention of Rule 8(3A) and the penalty of Rs. 10,000/- was imposed. 1.7 The appellant under its application dated 02-10-2014 requested the learned Commissioner to rectify the error apparent on record as regards quantum of interest. However, the application was not accepted by ....
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....n total duty of Rs. 44,34,803/- is shown as Rs. 4,33,921/-, instead of Rs. 43,921/-. He pleaded that the non-payment of duty for the month of August arose only due to an error by including the paise figures(decimals) in the cheque along with the figures of rupees and it occurred only due to bonafide mistake as the appellant did not know about such RBI guidelines. The bank also did not intimate the non-clearance of cheque. The error being unintentional, no penal action can be imposed, and that the extended period cannot be invoked. 3. Against this, the Ld AR, Shri P.S.Reddy reiterated the findings in the impugned order. He submitted that the appellant defaulted to pay duty for the month of August, 2010 due on 05-09-2010 and the same was p....
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.... balance in the account. Therefore, the contention of appellant that it was a bonafide mistake is acceptable. 6. The present demand is not duty and its interest. It is a demand of interest for delay in payment of interest. The interest demanded is not calculated upon the delayed amount of interest (ie. Rs. 41,843/-). It is calculated by considering that appellant has defaulted payment of duty on all months from October, 2010 till March, 2012. In other words, although appellant has paid duty correctly without default from, October, 2010 to March, 2012, it is considered that there is delay in paying duty and interest on the duty of each month is calculated and demanded. According to department, as per Section 8(3A) the appellant ought to h....
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....llant every month without any default. In the instant case, the department has accepted the duty paid by appellant even though the duty was not paid consignment wise. For reasons not known and not clear, only interest is seen demanded. If Rule 8(3A) is to be applied, there should be determination/demand of duty applying the legal fiction, and then the consequence of interest and imposition of penalty should follow. Generally interest follows the principal. Without principal amount there cannot be demand of interest alone. When there is no demand of duty for violation of Rule 8(3A), and when the duty paid is accepted by department, then the legal fiction provided in Rule 8(3A) having been not invoked in the show cause notice, I do not find t....