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2016 (4) TMI 795 - HC - Central ExciseInterest under Section 11AA - effect of amendment - Held that:- A careful look at the tabulation would show that the distinction between the two categories of cases that was maintained upto 11.5.2001 disappeared to some extent by the amendment inserted from 11.5.2001. Though a small distinction was still retained, the liability to pay interest became common for both categories of cases and a distinction was retained only in respect of the minimum ratio of interest and the date of commencement of liability post 11.5.2001. In cases where the payment was made voluntarily after determination of the amount of duty under Section 11A, the amendment stipulated a minimum rate of interest at 10% per annum and a maximum rate of interest at 36% per annum. But, in other cases, the minimum rate of interest was maintained at 18% per annum. Except this, the distinction between the two categories of cases was diluted. After amendment with effect from 8.4.2011, Section 11AA itself is removed. Therefore, all types of cases where there is a determination under Section 11A(2) are treated alike irrespective of the presence or absence of fraud, collusion, etc. Getting back to the cases on hand, it could be seen that the periods, in respect of which, the show cause notices were issued, were all from 1997 to 2000. The show cause notices covered by the Order in Original bearing Nos.18/2000 and 54/2000 were dated 2.4.1998, 1.7.1998, 18.11.1998, 1.4.1999, 30.7.1999 and 1.12.1999 as well as 5.4.2000 and 25.4.2000 respectively. The show cause notices covered by the Orders in Original bearing Nos.42/2001 and 43/2001 were exactly dated 11.5.2001. Hence, out of the four cases on hand, two relate to the show cause notices issued on the date, on which, the amendment to Sections 11AB and 11AA came into force. In respect of the remaining two cases, they cannot be covered by the amendment introduced with effect from 11.5.2001. In so far as the cases where show cause notices were issued before 11.5.2001, it is seen from all the show cause notices, the Orders in Original and the orders of the Appellate Authority that there was no allegation of fraud, collusion, misrepresentation, etc. Even the communication of the Superintendent dated 12.11.2013 does not categorise the case of the assessee as one where there was fraud, collusion, etc. But, the communication of the Superintendent dated 12.11.2013 refers to Section 11AB. Therefore, it is obvious that the amendment dated 11.5.2001 is what is sought to be taken advantage of. This cannot be done at least in respect of two cases that arise out of the Orders in Original bearing Nos.18/2000 and 54/2000 respectively dated 29.2.2000 and 30.10.2000. Hence, the questions of law in respect of the appeals arising out of these orders in relation to the interest claim, should be answered in favour of the assessee. There is a difficulty. In so far as the Order in Original bearing No.54/2000 is concerned, the demand for payment of interest was made at 24% per annum under Section 11AA. This demand, without any discussion, was upheld by the Appellate Authority as well as the Tribunal. The Appellate Authority as well as the Tribunal ought to have at least considered as to why a rate of interest at 24% was chosen between the minimum of 10% and the maximum of 30%. The case of the assessee was that there was a claim for refund, which could have been adjusted by the Department. While passing an order in appeal No.178/2003, the Appellate Commissioner found that at least in respect of the claim under Order in Original bearing No.18/2000, it was adjustable. Therefore, that portion of the order of the Tribunal as well as the order in appeal is without any application of mind to the quantum of interest under Section 11AA.
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