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2018 (2) TMI 918 - AT - Central ExciseDemand of interest - scope of SCN - neither the SCN nor the Order-in-Original dated 7.1.1977 makes any whisper about liability to pay interest - whether the appellant is liable to pay the interest demand of ₹ 4,99,48,695/-? - Held that: - there is no proposal for duty demand in the SCN and there is no determination of duty in the Order-in-Original dated 7.1.1977 which are the genesis of this litigation. The SCN as well as the order-in-original dealt only with the issue of classification and the denial of benefit of exemption under N/N. 25/1970. Section 11AA provides for charging of interest where a person chargeable with duty determined under sub-section (2) of section 11A fails to pay such duty within three months from the date of such determination. In such a case, a person would be liable to pay interest at such rate not below 10% and not exceeding 30% per annum as may be fixed by the Central Government on such date from the date immediately after expiry of said three months till the date of payment of such duty. Thus, when the duty is determined under sub-section (2) of section 11A, the assessee is liable to pay interest at the specified rate on the date which remained unpaid after three months of determination till actual payment. Determination of duty means the duty ascertained after adjudication as per sub-section (2) of Section 11A. For the interest to be payable, there must be an ascertained amount of duty - In the present case, there has been no such determination of duty - In the absence of determination of duty under sub-section (2) of section 11A, the provisions of section 11AA is not attracted. The demand of interest therefore cannot sustain. There is no determination of duty under sub-section (2) of section 11A and therefore the ingredients of Section 11AA are not attracted. Further, there is no show cause notice issued for demand of interest. The demand of interest has been made by issuing a letter. Demand of interest not sustainable - appeal allowed - decided in favor of appellant.
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