1. This is an appeal against the order dated 30.7.2001 passed by the Commissioner of Central Excise (Appeals), New Delhi. The issue is of interest under Section 11-AA of the Central Excise Act, 1944 (for short Act).
2. Shri Harishankar, learned Advocate has appeared on behalf of the appellants and he submitted that by virtue of show cause notice dated 5.3.90, a demand of Rs. 6,10,788.87 P has been raised on the ground that the benefit of SSI exemption under Notification No. 175/86 had been wrongly availed from 1.4.86 to 30.6.88; that by order in original dated 2.5.91, the Commissioner has confirmed the entire demand; that vide order dated 9.7.92, the Delhi High Court modified the terms of stay to furnishing of bank guarantee for Rs. 7,10,788.87P and the requisite bank guarantee was furnished on 30.7.92, which was thereafter renewed from time to time; that vide final order dated 11.5.2000, the Tribunal allowed Appeal No. 4500/91 in part confirming the demand for the period prior to 31.3.87 and dropped the demand for the period thereafter; that the Civil Appeal No. 4285/2000 filed by the appellants against the said final order was dismissed by the Hon'ble Supreme Court on 29.9.2000; that on 8.1.2001, the Deputy Commissioner wrote to the appellant directing to pay Rs. 4,10,475 along with penalty of Rs. 25,000 together with interest at the rate of 24% on Rs. 4,10,475 under Section 11-AA w.e.f. May 1995 till the date of actual payment; that on 10.11.2001, the appellants replied stating that there had never been an order quantifying the demand of Rs. 4,10,475 against it and, therefore, the question of payment of interest, does not arise; that on 31.1.2001, the Deputy Commissioner replied stating that the amount of Rs. 4,10,475 represented the portion of the initial demand of Rs. 6,10,788.87P which pertained to the period prior to 31.3.87 that on 15.7.2001, the Department enforced the entire bank guarantee of the appellants for Rs. 6,10,788.87P; that on 26.3.2001, the DC again wrote stating that an amount of Rs. 3,89,142 was still due from them and called upon the appellant to pay the said amount; that on appeal to the Commissioner, the learned Commissioner (Appeals) held that, "Rs. 4,10,475 and Rs. 25,000 be appropriated from the appellants bank guarantee; (ii) no interest was chargeable from 1.5.2001 onwards as the bank guarantee was available for enforcement by the department; and (iii) interest under Section 11AA on Rs. 4,10,475 had to be worked out from 2.5.91 to 1.5.2000. Thus, the Commissioner (Appeals) while dropping the demand for interest from 1.5.2000 onwards, included the additional amount of interest for the period from 2.5.91 to May 1995 which was never even demanded by the lower authority: that the entire proceedings were without jurisdiction and misconceived; that the Commissioner (Appeals) has, by creating of additional demand of interest for the period from 2.5.91 to May 95 exceeded his jurisdiction that he could have never added an additional interest demand over and above demanded by the DC; that the enhancement of interest by the Commissioner from 2.5.91 onwards is contrary to the Act itself; that no demand of Rs. 4,10,475 had been determined against the appellants till date.
3. Shri Ashok Kumar, learned DR, appeared on behalf of the Revenue and he submitted that the demand was reduced by the CEGAT from Rs. 6,10,788 to Rs. 4,10,475. That the learned Commissioner (Appeals) has ordered appropriation of the said amount and the penalty amount from the Bank guarantee and has determined the interest to be payable from 2.5.1991 to 1.5.2000. There is no illegality committed by the learned Commissioner (Appeals) therein.
4. After hearing the rival submissions and perusal of the records, we find it difficult to accept the contention of the learned Counsel that there was no demand of Rs. 4,10,475 from the appellant for the simple reason that the same was determined by this Tribunal and against which the appellant has gone in appeal before the Hon'ble Supreme Court and his appeal was also dismissed by the Hon'ble Supreme Court. Therefore, to contend that the appellant was not aware of his liability for the said amount is not correct. However, as regards the interest liability w.e.f. 2.5.1991 to May 1995, we hold that since the same was not demanded in the show cause notice, as such, the Commissioner (Appeals), by creating an additional demand of interest for the said period, has exceeded his jurisdiction and, therefore, the same is set aside. With these observations, the appeal stands disposed of accordingly.