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2015 (8) TMI 404 - SC - Central ExciseDemand of interest - whether the excise duty was in fact deposited late and therefore interest would be charged - Held that:- Section 11A of the Act permits the Central Excise Officer to recover duty not levied or not paid or short levied or short paid or erroneously refunded. It can be done within one year from the relevant date by serving show cause notice on the person chargeable with the duty. It is not necessary to state in detail the procedure prescribed therein. For our purposes it is sufficient to mention that Section 11AA of the Act provides that where a person chargeable with duty determined under Section 11A fails to pay such duty within three months from the date of such determination, he is liable to pay interest on the delayed period which is at the rate not below 18% and not exceeding 36% p.a. as for the time being fixed by the Central Government by Notification in the Official Gazette. Utilization of Cenvat Credit for delayed payment of duty - Held that:- Appellant paid the duty on clearing each consignment. Substantial portion of the duty, i.e., to the tune of ₹ 7 crores was paid in account current through PLA. However, for payment of small portion of a duty which was in the neighbourhood of ₹ 31 lakhs, the appellant utilised Cenvat Credit Account. It is this payment from Cenvat Credit which has become the bone of contention. The respondent communicated to the appellant that duty through Cenvat during this period, when facility under Rule 173G was withdrawn, is not permissible. Without demur, the appellant complied with the demand of the respondent by paying this portion of duty also through account current. However, this happened in May, 2002. The respondent now took the position that the custom duty of ₹ 31 lakhs was paid belatedly. As it was paid only in May, 2002, on this delayed payment, appellant was liable to pay interest @ 24% p.a. from the period from 19.12.2000 to 20.05.2002. Order-in-Original dated 13.06.2002 passed by the Commissioner affirming the demand in show cause notice has been confirmed by the Tribunal. It is imperative to point out that even the Department accepted the opinion of the High Courts. For this reason, judgments rendered by the High Courts were not challenged and instead to remedy the situation, Rule 8 of the Central Excise Rules, 2002 itself is amended by inserting sub-rule 3A vide Notification No.17/05-C.E. (N.T.) dated 31.03.2005 w.e.f. 01.04.2005. This Rule now specifically provides that in case of default in making payment of duty, the assessee shall be required to pay excise duty for each consignment by debit to the account current and not by utilising Cenvat Credit. This also lends credence to our view which we have taken in respect of unamended provision that was applicable at the relevant time. - Impugned order is set aside - Decided in favour of assessee.
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