9911796707
TMI Blog2007 (12) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the assessee and thereby reversing the concurrent findings of the Assessing Authority and First Appellate Authority on the question of payment of interest on the Modvat credit which was wrongly availed by the Assessee. 2. Stated in brief the facts leading to the present appeal are as under: (a) The respondent-assessee has been engaged in the manufacture of tools, tungsten carbide inserts, tools holders, special purpose machines, etc. The assessee availed credit of excise duty on the inputs under Central Excise Rules, 1944/Cenvat Credit Rules 2001 (for short "the Excise Rules"). During the course of the audit of the accounts of the assessee it was observed that the assessee had availed Modvat credit of Rs. 1,18,940/- on "painting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his said reply to drop the proceedings without imposing any penalty on him under Rule 173Q of the Excise Rules. (d) After considering the explanation submitted by the assessee in his reply to the said show cause notice and after giving him personal hearing the Asst. Commissioner 'D' Division, Bangalore, confirmed the demand of interest of Rs. 1,12,944/- under erstwhile Rule 57AH of the Excise Rules read with Section 11AB of the Act. (e) Aggrieved by the said order of the Assessing Authority the respondent assessee filed his appeal before the Commissioner of Central Excise (Appeals-II) Bangalore which came to be dismissed confirming the order in Original dated 31-3-2002 passed by the Assessing authority. Being aggrieved by the said orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also the principles laid down by this Court in CCE, Mangalore v. Shree Krishna Pipe Industries [2004 (165) E.L.T. 508 (Kar.) = 2004 (61) RLT 17 (Kar.)] 5. Per contra the learned counsel for the respondent-assessee urged that immediately after the audit objections were brought to the notice of the respondent-assessee that the Modvat credit, availed by him was irregular, he made payment of the same on 30-12-2000 without any delay and even before show cause notice dated 26-12-2001 was issued to him demanding the same and therefore it could not be said that the assessee had intention to evade the payment of duty so as to attract the payment of interest and penalty and therefore the Tribunal rightly allowed the appeal of the assessee and set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapatnam [2003 (161) E.L.T. 285 (Tri.-Bang.)] which came to be confirmed by the Hon'ble Apex Court in its decision reported in 2004 (163) E.L.T. A53. It is not laid down therein that where the duty is paid by the assessee before the issuance of show cause notice he would not be liable to pay interest under Section 11AB of the Act. Further, in the case of Commissioner of Central Excise & Customs, Town Centre, N-5, CIDCO, Aurangabad v. M/s. Padmashri V.V. Patil Sahakari Sakhar Karkhana Ltd. reported in 2007 (215) E.L.T. 23 (Bom.) = 2007-TIOL-419-HC-MUM-CX relied upon by the learned counsel for the appellant, the Bombay High Court, after elaborately considering the ratio laid down in the case of Rashtriya Ispat Nigam Ltd. referred to supra has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The provisions of Sections 11A, 11AA and 11AB provided for procedure for recovery of the said duty along with interest in case the assessee fails to pay the same. 9. In view of our foregoing reasons, we are of the considered view that the Tribunal was not justified in reversing the concurrent findings of the Assessing Officer and the First Appellate Authority in levying interest on the amount of credit which was availed by the respondent-assessee wrongly though the same was paid by the assessee prior to issuance of show cause notice. With the result the substantial question of law formulated in this appeal is answered in favour of the appellant Revenue. Therefore, the present appeal is allowed, the impugned order of the Tribunal is set as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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