TMI Blog2017 (4) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, or a situation where the duty determined is maintained by the appellate forum. Since the appellate authority vide order dated 05.01.2001 has not modified, but maintained the order passed by the adjudicating authority, the liability to pay duty starts from the date of determination of duty which the date of the adjudication order i.e. 04.12.1996. The respondent having not paid the duty within three months from 04.12.1996, the respondent is liable to pay interest till the date of payment of duty - the respondent is liable to pay interest on ₹ 4,12,050/- from 04.12.1996 till date of payment of duty. In regard to the duty demand of ₹ 6,20,103/- the argument of the department that the date of determination of duty is the date of first Order-in-Original i.e. 30.04.1997 is not tenable. In this matter, the Tribunal had remanded the matter for denovo adjudication. Even though in denovo adjudication the very same amount was determined, it will not set the clock back regarding date of determination of duty. Remand by the Tribunal would mean that the order under challenge has lost it s significance - respondent is not liable to pay any interest in respect of demand of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of ₹ 11,32,153/- (Rs. 6,20,103/- + ₹ 4,12,050/-+ ₹ 50,000/- + ₹ 50,000/- penalty). The properties of the respondent was attached and as a result of auction and further follow-up, an amount of ₹ 11,32,153/- along with an amount of ₹ 6304/- towards auction expenses was paid by the respondents on 13.06.2006. 6. Thereafter, the respondents were issued a further letter dated 02.08.2006 from the department asking them to pay an amount of ₹ 14,33,645/- towards interest on ₹ 10,32,153/- (duty demand). The department had calculated the said interest from the date immediately after 3 months from the date of the initial Order-in-Originals dated 04.12.1996 (regarding duty of ₹ 4,12,050/-) and 30.04.1997 (regarding duty of ₹ 6,20,103/-). To this letter, the respondents replied vide letter dated 09.10.2006, 19.12.2006 and 31.01.2007 stating that there was no demand for interest either in the show cause notice or in the duty confirmation orders and therefore they are not liable to pay interest. The department issued another letter dated 20.02.2007 directing the respondent to pay interest amount failing which action will be initiat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, the date of determination of duty is 04-10-1996 30-04-1997, which are after the introduction of interest clause in the Act. Hence, there is liability of the interest for the above duty amount. Further, the Superintendent has also informed that the mentioning of interest clause under Secion-11AA in the adjudication orders generally will not arise because the payment of interest will emanate only when the assessee does not pay the duty demanded within three months from the date of such determination. It is also informed that the adjudicating authority will not anticipate the consequences of payment of duty after issue of an adjudication order and it is only the field officers who will invoke statutory provisions of interest, if duty is not paid as ordered in the adjudicating orders. The worksheet was also enclosed along with this letter of clarification. 10. Meanwhile, the Hon ble High Court vide order dated 23.11.2007 disposed of the writ petition granting liberty to the respondent to file appeal against the above order dated 16.11.2007 and also directing both sides to maintain status-quo till the disposal of the appeal. 11. The respondent thereafter file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... times and even then the respondents have not bothered to appear or file written submissions. The matter is taken up for disposal after hearing the Ld. AR and perusal of records. 14. In the impugned order the Commissioner (Appeals) observed that the date of determination of duty in both orders is after 2001 and therefore as per sub-section (2) of Section 11AA there is no liability to pay interest. He has considered the date of passing the denovo adjudication order ( in regard to ₹ 6,20,103/-) and the date of appellate order (in regard to ₹ 4,12,050/-) which are respectively 31.12.2003 and 05.01.2001 as date of determination of duty. 15. Sub-section (2) was introduced in Section 11AA w.e.f. 11.05.2001. The relevant provision contained in Section 11AA is noticed as under: SECTION 11AA : Interest on delayed payment of duty. - Subject to the provisions contained in section 11AB; where a person chargeable with duty determined under sub-section (2) of Section 11A, fails to pay such duty within three months from the date of such determination, he shall pay, in addition to the duty, interest at such rate not below ten per cent and not exceeding thirty per cent per an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a situation of remand, or a situation where the duty determined is maintained by the appellate forum. 17. The Assistant Commissioner who passed order dated 16.11.2007 has relied upon the Circular issued dated 30.11.2006 which clarified Sub-section 1 of Section 11AA. He has proceeded to confirm the interest liability observing that the date of determination of duty in both orders is 04.10.1996 and 30.04.1997 which is after the introduction of interest clause (Section 11AA) in the Act. He did not take note of sub-section (2) of Section 11AA. 18. The Commissioner (Appeals) has set aside the interest liability stating that since the Tribunal remanded the matter and denovo adjudication was passed on 31.12.2003 the date of determination of duty would be date of denovo order in the case of duty demand of ₹ 6,20,103/-. In the case of duty demand of ₹ 4,12,050/- the date of determination of duty would be the appellate order dated which is 05.01.2001. The Commissioner (Appeals) has relied upon the judgment in the case of CCE, Pondicherry Vs Spic Pharmaceuticals Division [2006 (206) ELT 443 (Tri-Chennai)], the Commissioner (Appeals) to set aside the demand of interest hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of demand ₹ 4,12,050/-, the date of determination of duty, is the date of original adjudication i.e. 04.12.1996 is not without substance. The Commissioner (Appeals) has held that when the respondent filed appeal and appellate authority passed order dated 05.01.2001 confirming the same, the original order dated 04.12.1996 merged with the appellate order and therefore date of determination of duty has to be considered as date of appellate order which is 05.01.2001. I cannot agree with this view of the Commissioner (Appeals). Since the appellate authority vide order dated 05.01.2001 has not modified, but maintained the order passed by the adjudicating authority, the liability to pay duty starts from the date of determination of duty which the date of the adjudication order i.e. 04.12.1996. The respondent having not paid the duty within three months from 04.12.1996, the respondent is liable to pay interest till the date of payment of duty. 20. In regard to the duty demand of ₹ 6,20,103/- the argument of the department that the date of determination of duty is the date of first Order-in-Original i.e. 30.04.1997 is not tenable. In this matter, the Tribunal had rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14th July, 2000. The matter was before the A.O., for fresh determination on which an order came to be passed on 22nd March, 2002 and consequently the duty came to be ascertained on 22nd March, 2002. Duty was paid on 17th July, 2002. Once the duty was ascertained on 22nd March, 2002 no interest could have been demanded under sub-section (1) of Section 11AA in view of sub-section (2) as inserted in Section 11AA on 11th May, 2001. The above judgment has been followed by the Hon ble Madras High Court in the case of CCE, Chennai-II Vs Lucas TVS Ltd., [2016 (333) ELT 259 (Mad)] and by Hon ble High Court of Punjab Haryana in the case of CCE, Ludhiana Vs National Fertilizers Ltd., [2017 (347) ELT 225 (P H)]. The Hon ble High Court of P H observed as under: 8. Section 11AA of the Act provides that if an assessee fails to pay duty within three months from the date of determination, he is liable to pay interest thereafter. Explanations 1 and 2 thereof will not be applicable in the present case as in the case in hand the duty determined has not been reduced or increased by the appellate authority. Rather, it is a case where the Tribunal finding merit in the contention raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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