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2015 (9) TMI 1376 - CESTAT CHENNAI

2015 (9) TMI 1376 - CESTAT CHENNAI - TMI - Demand of interest u/s 11AA - whether demand of interest under Section 11AA is sustainable or otherwise - Held that:- Sub-Rule (3) of Rule 57I and Sub-Rule (8) of Rule 57U of CER clearly stipulates the recovery of interest where the appellant ails to pay amount determined within 3 months from the date of order the interest shall be payable as per Section 11AA of CEA. By virtue of the above provision of Rule 57(I) and Rule 57(U), Section 11AA is made app .....

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er is upheld - Decision in the case of CCE & C Aurangabad Vs Padmashri V.V.Patil S.S.K. Ltd. [2007 (7) TMI 6 - HIGH COURT, BOMBAY] followed - Decided against assessee. - Appeal No. E/549/2008 - Final Order No. 40677/2015 - Dated:- 26-6-2015 - Hon ble Shri R. Periasami, Technical Member,J. For the Appellant : Shri S. Murugappan, Advocate For the Respondent : Shri M. Rammohan Rao, DC (AR) ORDER 1. In the present case, the Hon'ble High Court, Madras in C.M.A.No.2072 of 2013 in M.P.No.1 of 2013 .....

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mand of interest under Section 11AA of the Central Excise Act. 3. The brief facts of the case are that appellants availed modvat credit on the inputs as well as on the capital goods during the year 1995 and 1999. Adjudicating authority disallowed the credit of ₹ 3,72,877 and confirmed the demand. The said was order was upheld both by Commissioner (Appeals) and this Tribunal vide Final Order No.854 to 858/2005 dt. 17.6.2005 and the appellants have paid the entire demand amount. The Departme .....

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cenvat credit is provided under Rule 57I of CCR. When the recovery of irregular credit made under CCR, the interest cannot be demanded under Section 11AA as it is not a demand made under Section 11A of Central Excise Act. He further submits that Commissioner (Appeals) has gone beyond the scope of SCN and also submits that allegations made in the show cause notice in paras 2 & 5 of the SCN are contrary. He further submits that reversal of credit was confirmed in the year 1999 to 2000 and if a .....

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deemd to be treated as duty not paid. Evenafter the Tribunal's order assessee has not paid entire amount in one lump sum but paid in various challans. Therefore, it is a case of non-payment of duty. Therefore, Section 11AA is rightly invoked for demanding interest and there is no time limit for recovery of interest which is automatic. 6. After hearing both sides I find that the short issue relates to whether demand of interest under Section 11AA is sustainable or otherwise. On perusal of rec .....

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der erstwhile Rule 57I & 57U of CER, Section 11AA cannot be made applicable for demand of interest. Their above plea is not justified for the reason that Sub-Rule (3) of Rule 57I and Sub-Rule (8) of Rule 57U of CER clearly stipulates the recovery of interest where the appellant ails to pay amount determined within 3 months from the date of order the interest shall be payable as per Section 11AA of CEA. By virtue of the above provision of Rule 57(I) and Rule 57(U), Section 11AA is made applic .....

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I is reproduced as under :- "(3) Where a manufacturer or an assessee fails to pay the amount determined under sub-rule (1) or sub-rule (2) within three months from the date of receipt of demand notice, he shall pay, in addition to the amount so determined, interest at such rate, as may be fixed, by the Central Board of Excise and Customs under section 11AA of the Act, from the date immediately after the expiry of the said period of three months till the date of payment." The word " .....

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pulsory. The relevant portion of the order is reproduced as under :- "7. Considering the scheme together, it is evident that interest chargeable u/s. 11AB is a sort of civil liability of the assessee, who has failed to pay the duty or who has short paid the duty. This is irrespective of the fact whether such non-payment/short payment is innocent or mala fide. ........... 10. So far as interest u/s. 11AB is concerned, on reference to text of Section 11AB, it is evident that there is no discr .....

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ared. The second aspect would be whether there is any discretion not to charge the interest u/s. 11AB at all and we are afraid, language of Section 11AB is unambiguous. The person, who is liable to pay duty short levied/short paid/non-levied/unpaid etc., is liable to pay interest at the rate as may be determined by the Central Government from time to time. This is evident from the opening part of sub-section (1) of Section 11, which runs thus : Where any duty of excise has not been levied or pai .....

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