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2016 (8) TMI 1070 - CESTAT BANGALORE

2016 (8) TMI 1070 - CESTAT BANGALORE - TMI - Refund claim of interest paid for the delay in discharging adjudication levies imposed on them - liability to pay interest under Section 11AB of the Central Excise Act 1944 - Held that:- the impugned order is not sustainable in law on the ground that interest cannot be demanded from the appellant under Section 11AB which was never resorted to in the show-cause notice and in the Order-in-Original. All along the proceedings the case of the department wa .....

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y the clearances in the present case were made during the period 1984-85 to 09.05.1989 which is much before 28.09.1996. Further the Board’s Circular is binding on the Revenue in view of the various judgments. - Decided in favour of the appellant with consequential relief - E/2000/2012 - Final Order No. 20653/ 2016 - Dated:- 24-8-2016 - Shri S. S. Garg, Judicial Member Shri Cherian Punnoose, Advocate Bangalore For the Appellant Smt Ezil Mathi, AR For the Respondent ORDER Per S. S. Garg The presen .....

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377; 3,38,515/- being the interest paid for the delay in discharging adjudication levies imposed on them. Based on the intelligence that the appellants were evading central excise duty on their product by floating concerns and resorting to clandestine clearance and undervaluation, the department finally seized the documents and after their investigation they came to the conclusion that there was duty evasion of ₹ 15,61,810.87 with respect of clearance made during the period 1984-85 to 09.0 .....

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4.1996. Aggrieved by the said order the appellant again filed an appeal before CEAGT, Bangalore. The case was again remanded and came before Commissioner of Central Excise, Mangalore, vide Order dated 23.01.2002. The Commissioner of Central Excise, Mangalore reduced the duty determined earlier to ₹ 10,83,725/- and imposed penalties vide Order-in-Original dated 06.05.2005. The appellant further appealed against this Order-in-Original before CESTAT, Bangalore and the Tribunal dismissed the a .....

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duty after three months from the date of determination of duty liability by the Central Excise Officer under sub-section (2) of Section 11A of the said Act. Thereafter the appellant received two letters from the Department dated 29.01.2010 and 02.02.2010 demanding interest of ₹ 2,93,379/- for delayed payment of duty in terms of Section 11AA of the Central Excise Act. The appellant vide their letter dated 08.02.2010 submitted that Section 11AA of the Central Excise Act 1944 was introduced i .....

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earances made after the introduction of the said Section i.e. w.e.f. 28.09.1996. Thereafter an attachment notice was issued by the Deputy Commissioner in respect of interest amount of ₹ 3,38,515/- and the appellants were made to deposit the said amount in installment up to 09.04.2010 and thereafter the appellant filed a refund claim for the interest amount of ₹ 3,38,515/- on the ground that the interest was erroneously recovered by the department. Thereafter a show-cause notice was r .....

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f the Central Excise Act 1944 cannot be applied for Section 11AA. Aggrieved by the said order, appellant filed an appeal before the Commissioner and the Commissioner (Appeals) vide his Order dated 02.04.2012 rejected the appeal filed by the appellant and upheld the Order-in-Original by holding that the appellants are liable to pay interest under Section 11AB of the Central Excise Act 1944. Aggrieved by the impugned order, the appellant has filed the present appeal. 3. Heard both the parties and .....

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in the impugned order has clearly held that Section 11AA of the Act is not applicable to the present case, since the duty became payable after the Finance Bill 2001 received the assent of President of India. He further submitted that despite holding the only question which was there before him in favour of the appellant, the learned Commissioner (Appeals) proceeded further to reject the appeal on a completely new ground that the appellants were liable to pay interest under Section 11AB of the Ac .....

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claim of the appellant on a completely new ground. He also submitted that it is a settled law that the appellate authority cannot go beyond that original order or the show-cause notice and it cannot also make out a new case to the Revenue on the basis of a completely new ground. In this regard he placed reliance on the following decisions: (i) Nilos India Pvt. Ltd. Vs. CC, Chennai 2009 (241) E.L.T 270 (Tri.-Chennai) (ii) Tata Johnson Controls Automotive Vs. CC, Mumbai -2004 (167) ELT 93 (Tri.-M .....

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akari Sakkare Karkhane Niyamit Vs. CCE, Belgaum 2004 (169) ELT 191 (Tri.-Bang.) (x) Godrej Industries Ltd. Vs. CCE, Mumbai 2008 (229) ELT 484 (SC) 4.1. He further submitted that the appellants are not liable to pay interest even under Section 11AB of the Central Excise Act 1944 in view of the Board s Circular dated 26.08.2002 which clarified Section 11AB and observed that Section 11AB can be invoked only in respect of clearances made after 28.09.1996 irrespective of the date of passing of the ad .....

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evant portion of the judgment is extracted below: 2. It has been found by the Tribunal that the clearance were made by the assessee during the period from September 1995 to January 1996. The law in force at the time did not permit the levy of penal interest. Such a levy came to be imposed only after passing of Finance (No. 2) Bill, 1996 which received the presidential assent on 28-9-1996. It is evident that the amendment was effected several months after the goods had been cleared. The assessee, .....

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ase of Marcandy Prasad Radhakrishna Prasad P. Ltd. Vs. CCE 1998 (102) ELT 705 (Tri.) has held that recovery of interest would not be applicable to duty evaded during the period prior to coming into force of the said Section. Aggrieved by the Tribunal decision, the department preferred an appeal before the Hon ble Supreme Court and the Hon ble Supreme Court dismissed the appeal filed by the department as reported in 1999 (107) ELT A121 (SC). He also submitted that the demand cannot be made withou .....

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se notice and confirm or demand something which is not there in the show-cause notice. For this he relied upon the decision of the Madhya Pradesh High Court in the case of C. Cus. & C.Ex. Bhopal Vs. Tirupati Steel Industries as reported in 2005 (182) E.L.T 149 (M.P) wherein it has been held that the liability to pay interest under Section 11AA does not arise when it is not proposed in the show-cause notice to levy interest on duty. 5. On the other hand the learned AR submitted that the appel .....

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