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2016 (11) TMI 1225 - CESTAT HYDERABADInterest on delayed payment of interest - Held that: - Rule 8(3A) states that it shall be deemed that such goods have been cleared (during the period of default) without payment of duty and the consequences and penalties shall follow. Interestingly, though Rule 8(3A) speaks about paying duty for each consignment at the time of removal, it is seen that department has not calculated the duty accordingly. Instead, interest alone is demanded. The demand of interest is seen calculated on the duty already paid by appellant every month without any default. In the instant case, the department has accepted the duty paid by appellant even though the duty was not paid consignment wise. For reasons not known and not clear, only interest is seen demanded. If Rule 8(3A) is to be applied, there should be determination/demand of duty applying the legal fiction, and then the consequence of interest and imposition of penalty should follow. Generally interest follows the principal. Without principal amount there cannot be demand of interest alone. When there is no demand of duty for violation of Rule 8(3A), and when the duty paid is accepted by department, then the legal fiction provided in Rule 8(3A) having been not invoked in the show cause notice, I do not find the claim of interest alone would be sustainable. Extended period of limitation - Held that: - it is clear that default to pay duty in August, 2010 was only a bonafide mistake. I find that the department has not placed any evidence to show that there was any suppression of facts, wilful miss-statement or fraud on the part of appellant with intent to evade payment of duty. Therefore, I find that the show cause notice is time barred. I hold that the demand being time barred is unsustainable - appeal allowed - decided in favor of appellant.
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