TMI Blog2014 (6) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the date of determined of duty is bound to pay interest at the prescribed rate for the period of delay. Sub-section (2) says that sub-section (1) is not applicable where the duty became payable on or after the date on which the Finance Act, 2001 received Presidential assent. It was on 11/5/2001 that the Finance Act, 2001 came into force. In this scenario, there can be no levy of interest under sub-section (1) of Section 11AA on the amount of duty paid by the assesse for the period upto 10th of May, 2001. In respect of the amount of duty paid for the period from 11/5/2001, interest on duty is leviable under Section 11AB of the Act in as much as sub-section (1) of Section 11AA opens with the clause subject to the provision of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvocate For the Respondent : Sri S.P. Pal, Appraiser (A.R.) JUDGEMENT Per DR. D.M. MISRA; This is an appeal filed against Order-in-Appeal No. 42/Kol-VII/2011 dated-24/02/2011 passed by the Commissioner of Central Excise (Appeals), Kolkata. 2. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of Door Trims (Substrates) falling under Chapter 87 of CETA, 1985. During the relevant period i.e. from July, 1996 to March, 2001, they had supplied these goods to M/s. General Motors of India, Gujarat. In the manufacture of these goods, they have used Moulds supplied free of cost by M/s. General Motors of India. The cost of the said free issue materials were not included in the value of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty. He submits that Section 11AB in its present form introduced w.e.f. 11/5/2001 and in view of the judgment of the Larger Bench in the case of 2005 (68) RLT 122 (CESTAT-LB), interest cannot be demanded prior to the said date. Further, he has referred to the Division Bench judgment of this Tribunal in the case of Godrej Boyce Mfg. Co. Ltd. Vs. Commr. of Central Excise , Mumbai-II reported in 2010 (262) ELT 286 (Tri-Mumbai) wherein it has been laid down that interest under Sub-Section(1) of Section 11AA or under Section 11 AB of CEA, 1944 in the amended form cannot be charged before the said date. Further, he has submitted that inclusion of the value of moulds supplied free of cost by the customers, in the value of finished goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of limitation prescribed under Section 11A of the CEA, 1944. He submits that the present SCN dated 28/7/2005 had been issued demanding interest for short levy of duty for clearances during 27/7/1996 to 28th March, 2001. Accordingly, the demand of interest for the period after 28/7/2000 covered under extended period of limitation on the ground of suppression of facts. 5. Heard both sides and perused the records. The short question needs to be determined is whether interest under Section 11AB of CEA, 1944 is attracted on account of the major portion of differential duty paid in July, 2001 and balance in March, 2003 for the clearances effected during July, 1996 to March, 2001. Undisputedly, the differential duty becomes payable as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was on 11/5/2001 that the Finance Act, 2001 came into force. In this scenario, there can be no levy of interest under sub-section (1) of Section 11AA on the amount of duty paid by the assesse for the period upto 10th of May, 2001. In respect of the amount of duty paid for the period from 11/5/2001, interest on duty is leviable under Section 11AB of the Act in as much as sub-section (1) of Section 11AA opens with the clause subject to the provision of Section 11AB. In the result, interest can be levied on that part of the amount of duty which pertains to the period from 11/5/2001 to 30/6//2001. This liability, obviously, is unaffected by the fact that such duty was paid within the period of 3 months prescribed under Section 11AA (1). It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. Moreover, the appellant had stated that in the show cause notice there was no demand of interest. We do not feel that it is necessary to go into that aspect. What is important is that legally interests could not have been demanded in respect of demands arising prior to 11/5/2001. Therefore, the demand of interest in the impugned order is not in accordance with the law. Hence, we set aside the demand of interest. Thus, the appeal is allowed in the above terms. 7. On the other hand, the Ld. A.R. for the Revenue referred to the recent decision of the Hon ble Supreme Court judgment in the case of Commr. of Central Excise, Pune Vs. SKF India Ltd. (Supra) and International Auto Ltd. (Supra). On careful analysis of the said decisions, I fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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