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TMI Blog2010 (3) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Act, 1944 cannot be demanded or charged from the assessee who has paid the duty before issuing of the show cause notice. 2. Briefly the facts of the case are that the respondent M/s. Creative Dying & Printing Mills Pvt. Ltd. is engaged in the processing of cotton and Manmade fabrics. Between March, 2001 and April, 2001, the respondent paid duty of excise on the processed fabrics on ad valorem basis. However, from May, 2001 they opted to work under the Compounded Levy Scheme under Notification No. 16/2001-C.E. (N.T.), dated 30-4-2001, which, for availment of the scheme, prescribed the condition that value of plant and machinery installed in the factory of an independent processor should not exceed Rs. 3 crores. The respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest. However, the adjudicating authority confirmed the demand against the respondent. An appeal was filed by the assessee which was dismissed by the Commissioner (Appeals). The aforementioned orders were challenged by the respondent before the Tribunal which allowed their appeal and held that interest is not chargeable when duty was paid before the issuance of a show cause notice by the Department. Reliance was placed on the decision of the Tribunal's Larger Bench in the case of C.C.E., Delhi-III v. Machino Montell (I) Ltd. - 2004 (168) E.L.T. 466 and Warner Lambert India Ltd. v. CCE, Bangalore - 2004 (174) E.L.T. 386. It is this order which has been impugned in the present appeal. The following questions of law arise in the present app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Central Excise, Pune v. SKF India Ltd. reported as 2009 (239) E.L.T. 385 (S.C.). 8. Learned counsel has further argued that in the present case, the valuation of plant and machinery of the respondent had exceeded Rs. 3 crores which was well within their knowledge and hence they were not entitled to the availment of compounded levy scheme and it was only after physical verification was conducted by the Department that they paid the differential duty of excise. Learned counsel further submits that a wrong declaration has been given by the respondent before the Central Excise Authorities. 9. The arguments raised by the counsel for the appellant have been vehemently controverted by the counsel for the respondent, who has submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unpaid duty on the basis of his own ascertainment or as ascertained by the Central Excise Officer and therefore, the Tribunal was right in holding that the assessee is not liable to pay any interest. 11. The question whether the assessee is liable to pay interest in case of default or in case where differential duty has been paid even prior to the issuance of notice by the Central Excise Officers and the effect of sub-section (2B) of Section 11A of the Act, came up for consideration before the Apex Court in SKF India Ltd. (supra), wherein it has been held as under :- "10. Sub-section (2B) of section 11A provides that the assessee in default may, before the notice issued under sub-section (1) is served on him, make payment of the unpaid du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apex Court and it has been held as under :- "14 We are unable to subscribe to the view taken by the High Court. It is to be noted that the assessee was able to demand from its customers the balance of the higher prices by virtue of retrospective revision of the prices. It, therefore, follows that at the time of sale the goods carried a higher value and those were cleared on short payment of duty. The differential duty was paid only later when the assessee issued supplementary' invoices to its customers demanding the balance amounts. Seen thus it was clearly a case of short payment of duty though indeed completely unintended and without any element of deceit etc. The payment of differential duty thus clearly came under sub-section (2B) of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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