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2015 (5) TMI 245 - MADRAS HIGH COURTPenalty u/s 11AC - Interest u/s 11AB - Discretion of Tribunal to impose penalty and interest - Held that:- Insofar as the issue relating to the imposition of penalty under Section 11AC of the Central Excise Act is concerned, if tax is paid before issuance of show cause notice under the provisions of the Finance Act, 1994, the said issue now stands resolved by a Larger Bench decision of the Supreme Court in Union of India and others - Vs - Dharamendra Textile Processors & Ors. [2008 (9) TMI 52 - SUPREME COURT], wherein it was held that penalty under Section 11AC of the Central Excise Act is mandatory and there is no element of discretion. The provisions of Section 11AB of the Central Excise Act came into effect from 28.9.1996 by Finance (No.2) Act, 1996. No doubt that in the year 2001, there is a change in the rate of interest from 11.5.2001 from 10% - 36% to 18% - 36%, but that is irrelevant. Therefore, the plea of the appellant that the adjudicating authority was fully justified is imposing interest is sustainable. Further, there is no escapement for the assessee from payment of interest under Section 11AB of the Act, even though the assessee had paid the duty prior to issuance of show cause notice. Accordingly, the order of the Tribunal deleting the interest levied under Section 11AB of the Central Excise Act is also liable to be set aside. - no hesitation to hold that interest and penalty are imposable and there is no discretionary power vested with the authorities for waiving the same. - both the Commissioner (Appeals) and the Tribunal have no discretion to waive the interest and penalty and, therefore, the orders are liable to be interfered with - Decided in favour of Revenue.
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