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2013 (10) TMI 992 - AT - Central ExciseInterest on Duty - Whether interest on duty/ cenvat credit demanded by applying proviso to Section 11A or Section 11AA with Cenvat Credit Rules or under Rule 57(I), is payable under Section 11AB prior to 11.05.01 - Held that:- Following EXOTIC ASSOCIATES Versus COMMISSIONER OF CENTRAL EXCISE [2009 (11) TMI 293 - GUJARAT HIGH COURT] - the demand relates to the period subsequent to 28-9-1996 and the earlier provision of Section 115 was not considered by the Tribunal, the order of the Tribunal is set aside on this point and remand the matter to the Adjudicating Authority to decide the whole issue with regard to charging of interest keeping in mind the provisions contained in unamended Section 11AB of the Act - the interest liability arises on the appellants under the provisions of Section 11AB of Central Excise Act, 1944, and even prior to 11.05.2001. The provisions for charging of interest under the Central Excise Act was brought in for the first time from 28.09.96 by introduction of Section 11AB to the Central Excise Act, 1944 - The provision mandated levy of interest on duty not paid, or short paid or erroneously refunded from the first day of the succeeding the month in which the duty ought to have been paid - These provisions of Section 11AB as introduced from 28.09.96, were, however limited to cases of demand arising due to reason of fraud, collusion or any wilful mis -statement or suppression of facts with intent to evade payment of duty - prior to introduction of Section 11AB in the Statute, interest was liable to be paid by introduction of provisions of Section 11AA in the statute which came into effect from 26.05.95, which provided for interest on the demand of the duty which were confirmed under the provisions of sub-section 2 of Section 11AB of the Central Excise Act, 1944 - Noting the lacuna which failed to enable levy of interest in cases wherein there was an element of fraud, collusion or any wilful mis -statement or suppression of facts with intent to evade payment of duty, provisions of Section 11AB was introduced w.e.f . 28.09.96 - On a holistic reading of the amendment w.e.f . 11.05.01, the amendment has enlarged the scope of the coverage of recovery of interest to all cases wherein the demand has been confirmed by the authorities or has been voluntarily paid by an assessee - The amendment does not wipe out the existing liability to pay interest in respect of cases involving fraud, collusion, any wilful mis-statement of facts with intent to evade payment of duty - the amended sub-section 2 of Section 11AB from 11.05.01 only mandates that interest liability cannot be fastened under the amended Section 11AB prior to 11.05.01 – Decided against Assessee.
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