TMI Blog2016 (11) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... has accepted the duty paid by appellant even though the duty was not paid consignment wise. For reasons not known and not clear, only interest is seen demanded. If Rule 8(3A) is to be applied, there should be determination/demand of duty applying the legal fiction, and then the consequence of interest and imposition of penalty should follow. Generally interest follows the principal. Without principal amount there cannot be demand of interest alone. When there is no demand of duty for violation of Rule 8(3A), and when the duty paid is accepted by department, then the legal fiction provided in Rule 8(3A) having been not invoked in the show cause notice, I do not find the claim of interest alone would be sustainable. Extended period of lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th of the following month i.e. 05-09-2010 but paid the same onlt on 23-10-2010. Interest towards delay for late payment of this amount to the tune of ₹ 41,843/- was paid by appellant on 31-03-2012. 1.3 The Range Officer, Range-III, Nellore, vide his letters dated 20-06-2012, 10-07-2012, 06-09-2012, 05-11-2013 and 22-11-2012 asked the appellant to pay the interest, for the reason that the duty on the clearances made during the period from 05-10-2010 to 31-03-2012( during the period of default) was not paid consignment-wise as provided in Rule 8(3A) of Central Excise Rules, 2002. The appellant vide their reply dated 03-03-2012 stated that appellant had deposited the cheque towards duty on 04-09-2010 vide challan in the State Bank of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he penalty of ₹ 10,000/- was imposed. 1.7 The appellant under its application dated 02-10-2014 requested the learned Commissioner to rectify the error apparent on record as regards quantum of interest. However, the application was not accepted by the department and was advised to file appeal as only remedy. Hence this appeal. 2. On behalf of the appellant the Ld. Counsel Shri S.J.Vyas argued both on merits as well as on the ground of limitation. The show cause notice dated 24-09-2013 covers the period 9/2010 to 3/2012, which is issued invoking extended period of limitation. The demand in the show cause notice is only for payment of interest. The allegation is that appellant violated Rule 8(3A) of Central Excise Rules, 2002. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extended period cannot be invoked. 3. Against this, the Ld AR, Shri P.S.Reddy reiterated the findings in the impugned order. He submitted that the appellant defaulted to pay duty for the month of August, 2010 due on 05-09-2010 and the same was paid belatedly only on 23-10-2010. Though the duty was paid, the interest for the delayed payment of ₹ 41,843/-, was not paid. This interest was paid only on 31-03-2012. As per Rule 8(3), when the duty is defaulted, the appellant has to pay the outstanding amount along with interest. Rule 8(3A) provides that when assessee defaults payment of duty beyond 30 days from due date, then not withstanding anything contained in sub rule (1) and (4) of Rule 3 of Cenvat Credit Rules, 2004, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id duty correctly without default from, October, 2010 to March, 2012, it is considered that there is delay in paying duty and interest on the duty of each month is calculated and demanded. According to department, as per Section 8(3A) the appellant ought to have paid duty, while clearing each consignment. Therefore, the appellant has to pay interest upon the duty that has been already paid. The table below shows the details of demand of interest. S.No. Month Total duty (Rs.) Interest (Rs) 1. October, 2010 1449008 10271 2 November, 2010 19185660 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March,2012 1951802 13419 Total 64812233 918418 7. Rule 8(3A) states that it shall be deemed that such goods have been cleared (during the period of default) without payment of duty and the consequences and penalties shall follow. Interestingly, though Rule 8(3A) speaks about paying duty for each consignment at the time of removal, it is seen that department has not calculated the duty accordingly. Instead, interest alone is demanded. The demand of interest is seen calculated on the duty already paid by appellant every month without any default. In the instant case, the department has accepted the duty paid by appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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