2017 (9) TMI 1172

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....ost of production which was higher than the cost of production on which the appellant had calculated the duty liability. Therefore, the appellant suo moto paid the differential duty of Rs. 40,54,450/- on the revised value by debiting the same from Cenvat account on 10.07.2007. After payment of differential duty, the Department raised the demand of interest on the appellant. A show cause notice was issued on 13.08.2010 demanding interest of Rs. 5,20,411/- and proposing penalty under Rule 25 of Central Excise Rules. The demand was confirmed by the adjudicating authority along with imposition of equivalent penalty under Rule 25 of the Central Excise Rules, 2002. The order of the adjudicating authority for confirmation of demand was upheld by t....

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....Hon'ble High Court of Delhi in the case of Kwality Ice Cream Company Vs. UOI (supra) that the period of limitation that applies to a claim for the principal amount should also apply to the claim of interest thereon. In the said judgment, the Hon'ble High Court held as under:- "4. The learned counsel for the petitioner drew our attention to a decision of the Tribunal reported in 1996 (86) E.L.T. 144 entitled Collector of Customs, Madras v. TVS Whirlpool Limited, in which it was held that the lower authority was right in holding that the demand beyond the period of six months from the clearance of goods, was barred by limitation. This conclusion was arrived at based on the logic that the period of limitation for demanding interest ought to....

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.... we take the letter dated 25-10-2004 as the first demand of interest, although that letter was in respect of a demand for differential duty, the demand would still be beyond a period of three years." 7. The said decision has been followed by the Hon'ble Punjab & Haryana High Court in the case of CCE Vs. VAE VKN Industries Pvt. Ltd. (supra) wherein it has been held as below:- "6. There is no dispute that assessee has paid the differential duty on supplementary invoices regularly and has shown the same in the ER-I returns, which were filed regularly before the department, therefore, issuance of show cause notice for interest on the delayed payment should also be within a period of one year as stipulated under Section 11A of the Act. The....