2017 (9) TMI 988

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....A-600/KOL/2009 dated 09.10.2009 the Tribunal upheld the demand of duty & penalty and remanded the matter to the Adjudicating Authority on demand of interest. By the impugned order, the Commissioner confirmed the recovery of interest at the appropriate rate during the period from November 1996 to March 1999 under Section 11AB of the Central Excise Act, 1944. The appellant filed this appeal. 2. Heard both sides and perused the appeal records. 3. For the proper appreciation, the relevant portion of the Tribunal s order is reproduced below:- In respect of the demand of interest, we find that in the adjudication order, the demand is for recovery of interest at appropriate rate without mentioning any Section of the Central Excise Act. Fu....

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....T 162 (S.C.). 5. I find that CBEC vide Circular No. 655/46/2002-CEX dated 26.06.2002 clarified as under:- "6. Section 11AB(2) [as well as Section 11AB(1)] has been substituted w.e.f. 11.05.2001 by the Finance Act, 2001, making it now very clear that Section 11AB will aply only to cases where duty had become payable or ought to have been paid after 11.05.2001. Further, proviso to Section 11AB(1), as inserted w.e.f. 11.05.2001, makes it quite clear that duty becomes payable on the basis of instructions or directions of the Hoard also and not necessarily because of adjudication of a case." 6. This Bench of the Tribunal in the case of Birla Corporation Ltd, following the above circular held that the interest under Section 11AB is liabl....

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....Sec. 11AA of the Act, as this  5. provision stood at the material time, an assessee who fails to pay the duty determined under sub-section (2) of Section 11AA of the Act, within 3 months from the date of determined of duty is bound to pay interest at the prescribed rate for the period of delay. Sub-section (2) says that sub-section (1) is not applicable where the duty became payable on or after the date on which the Finance Act, 2001 received Presidential assent. It was on 11-5-2001 that the Finance Act, 2001 came into force. In this scenario, there can be no levy of interest under subsection (1) of Section 11AA on the amount of duty paid by the assessee for the period up to 10th of May, 2001. In respect of the amount of duty paid for ....

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.... interest would not be leviable prior to the date on which the Finance Bill, 2001 received the assent of the President. In the present case, it is not in dispute that the Central Excise Duty on the goods procured indigenously became payable prior to 2001. Precisely, the date is 11-5-2001, because the amendment provisions of Section 11AB came into effect only with effect from 11-5-2001. As the duty involved in this case is prior to that, this provision cannot be made applicable. Moreover, the appellant had stated that in the show cause notice there was no demand of interest. We do not feel that it is necessary to go into that aspect. What is important is that legally interests could not have been demanded in respect of demands arising prior ....