TMI Blog2011 (9) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... duty worked out to Rs.26,90,890/- which the appellant deposited in January 2003. Correctness of demand and payment is not being disputed. The only issue involved is whether they are required to pay interest in terms of provisions of Section 11AB of CEA, 1944 for delayed payment of duty. 2. Show cause notice was issued to them on 8.7.05 which culminated in confirmation of interest at the Commissioner (Appeal)'s level whose order has been impugned in this appeal. 3. The appellant's main contention is that the duty paid was not determined under sub-section 2 of Section 11A and as such provisions of Section 11AB are not attracted. However, we find that this contention does not have any merit in view of Tribunal's decision in Gujarat State Fertilizers Chemicals Ltd. Vs. CCE Vadodara 2007 (82) RLT 510 (CESTAT-Ahmedabad) wherein it was held that even where the duty paid prior to issuance of show cause notice, interest in terms of provisions of Section 11AB is leviable. Further, Section 11AB clearly provides as to whether duty is paid under sub-section 2 or sub-section 2B of Section 11A, interest is leviable. Appellant contend that interest is of return or compensation for the use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wered to go beyond the statute which created it. Since Section 11AB is clear and unambiguous, the Tribunal cannot go into revenue neutrality. 6. In view of the above position, the appeal is rejected. (Pronounced in Court on----------) (Archana Wadhwa) Member (J) (B.S.V. Murthy) Member (T) Per: Archana Wadhwa: The said appeal was earlier heard by me as a Single Member as the same falls under the jurisdiction of Single Member Bench. Vide my order dt.3.3.08, the matter was referred to Larger Bench. However, when the appeal papers were placed before Hon'ble President for constitution of Larger Bench, the Hon'ble President ordered as under, which is communicated vide Registrar's letter dt.24.3.08. "The decision in the case of Gujarat State Fertilizers Chemicals 2007 (82) RLT 510, was by a Division Bench, and therefore binding on the Single Member Bench. Sitting by singly, therefore, the learned Member could not refer the case to Larger Bench, Hence, regret." Thereafter, the matter was discussed with Hon'ble President, who ordered as under which is communicated vide Dy.Registrar's letter dt.14.8.08. "In view of the ratio of the decision of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. 4. However, I find that the differential duty required to be paid by the appellant and actually paid by them subsequently was available as MODVAT credit to their own unit, where such goods were sent. As such, the entire exercise was revenue neutral exercise. Inasmuch as the interest is a bondage or necessary to the principal amount, the same would not be liable to be paid by them as no amount was required to be retained by Revenue. The entire purpose of charging interest is to compensate the payee for delay in payment and to reward the payee for holding him back from the possession and enjoyment of the money due to him. In Mitra's Legal and commercial dictionary, Fifth Edition, Interest stand defined. In the wide sense, the same is the return or compensation for the use or retention of another's money. In narrow sense, the word means the amount which one has contracted to pay for the use of borrowed money. In P Ramanatha Aiyar's Advance Law Lenicon, Vol.2 (2005), 3rd Edition, Interest is a consideration paid either for use of money or for forbearance in demanding it, after it has fallen due. It is a compensation allowed by law or fined by parties, or permitted by custom or us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st them would not be justifiable and would be against the basic principle of law of justice, equity and good conscience. 8. In the case of M/s. Sneh Enterprises Vs. Commissioner of Customs New Delhi 2006 (202) ELT 7 (SC ), their Lordships observed that it is trite law that while interpreting the statute, the courts not only may take into consideration the purpose for which the same had been enacted, but also the mischief it seeks to suppress. While dealing with a taxing provision, the principle of 'Strict Interpretation' should be applied. The Court shall not interpret the statutory provision in such a manner which would create an additional fiscal burden on a person. 9. In the present case, whatever amount was required to be paid by the appellant was immediately earned back as CENVAT credit by their own recipient unit. Thus, by less or late payment, the appellant gets no benefit and conversely the department suffers no loss. In this scenario and in view of forgoing discussion, I find that there is no justification for invoking the provisions of Section 11AB and charging interest. However, I find that the Tribunal in case of Gujarat State Fertilizers Chemicals 2007 (82) R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hnical) or no interest would be leviable as observed by Member (Judicial), but as there is already a contra decision, the issue is required to be referred to Larger Bench. (B.S.V.Murthy) Member (T) (Archana Wadhwa) Member (J) (Pronounced in Court on 7.9.2010) Opinion of 3rd Member on Difference of Opinion between the Bench in the case of Bayer ABS Ltd. Vs. CCE vadodara in Appeal No. E/40/2007 Per: M V Ravindran: This Difference of Opinion is listed before me as per the directions of Hon'ble President for deciding the points of difference in the matter. 2. The difference of opinion in this regard is as under: Where the duty short paid by an assessee is available as credit to the recipient unit of the same assessee, interest in terms of the provisions of Section 11AB required to be confirmed, as observed by Member (Technical) or no interest would be leviable as observed by Member (Judicial), but as there is already a contra decision, the issue is required to be referred to Larger Bench. 3. The ld.Counsel appearing for the appellant submits that the issue involved in this case is regarding interest on the amount of duty that was not discharged due to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises Vs. CC ii) 2008 (223) ETL 9 (SC) CCE Vs. Phil Corporation Ltd. iii) AIR 1992 SC 1846 Administrator Muni. Corpn., Bilaspur Vs. Dartatrya Dahankar iv) AIR 1985 SC 1499 Girdharilal Sons Vs. Balbir Nath Mathur 3.1 It is his further submission that no prejudice is caused to the Revenue, nor any benefit to the appellant by late payment of differential duty and hence, interest being a quasi-punishment or penalty for late payment, should not be charged. For this proposition, he relied upon the judgment of Punjab Haryana High Court in the case of CCE Vs. Rane NSK Steering Systems Ltd. 2009 (13) STR 327 (P H) . 4. Ld. SDR, on the other hand, submits that the issue is not of revenue neutrality but discharge of correct duty liability in time. He would submit that as per the provisions of Section 11AB, such interest liability arises on the appellant if he has not discharged duty liability in time. He would relied upon the decision of the Hon'ble Supreme Court in the case of Uoi Vs. Ind-Swift Laboratories Ltd. and is the case of CCE Pune Vs. SKF India Ltd 2009 (239) ELT 385 (SC) . 5. I have considered the submissions made at length by both sides and perused the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1: Where the duty is determined to be payable is reduced by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the Court, the interest shall be payable on such reduced amount of duty. Explanation 2: Where the duty determined to be payable is increased or further increased by the Commissioner(Appeals), the Appellate Tribunal or, as the case may be, the Court, the interest shall be payable on such increased or further increased amount of duty." On plain reading of the provisions of Section 11AB as reproduced herein above, interest liability arises, as and when any duty liability is deferred and subsequently discharged. Even when the amount is paid by the appellant himself based on own ascertaining of the duty liability, it is mandatory that the interest liability arises. 8. As regards the contentions raised by ld. Counsel that the entire issue is of revenue neutrality, I do not agree with the contention as the appellants had not challenged the leviability or demand of differential duty based upon the cost of production before lower authorities. Hence, on presumptive ground that the entire demand of duty was liable to be set aside on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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