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2023 (4) TMI 598 - AT - Central ExciseBenefit of Cenvat credit on the inputs and input services which were used in the manufacture of the final product - Interest - penalty - HELD THAT:- The undisputed facts of the case are that the appellant was liable to pay excise duty and had not done so and during the first round of litigation, the appellant had paid Rs. 11,42,678/- as duty along with interest of Rs. 12,49,677/- and a penalty of Rs. 2,85,670/-. This tribunal had allowed the benefit of Cenvat credit in the first round of litigation and remanded the matter to the original authority for calculation. There is no dispute regarding the calculations and all benefits which the appellant was entitled to have been given by the Joint Commissioner while re-determining the duty. It is also not in dispute that the excess duty deposited in the first round of litigation has been refunded to the appellant along with the interest applicable on such amount. Interest - HELD THAT:- Interest under section 11AA of the Central Excise Act is to be calculated on the amount of duty not paid or short paid. If the duty gets reduced, so should the interest. The Department cannot retain any excess amount paid as interest over and above what is due. The Joint Commissioner has wrongly rejected the refund of the interest. Penalty - HELD THAT:- Mandatory penalty under section 11AC @ 25% has to be calculated on the amount of duty not paid or short paid. Once the duty has been re-determined the amount of penalty should automatically be re-determined. The excess amount paid as interest and as penalty under section 11AC must be refunded to the appellant. The respondent are directed to refund the excess amounts deposited as interest and as penalty under section 11AC by the appellant during investigation - appeal allowed.
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