Full Judgment
2. Learned Advocate for the appellants submits that the differential duty is payable by them for the period 1.4.2001 to 1.4.2003. It is his submission that the payment of differential duty arose due to the fact that there was an upward revision of the price of their goods which was supplied to their customers. Since the goods were already cleared on payment of duty they raised supplementary invoices showing the raised price and calculated the differential duty and deposited the same with the Government. He submits that they were issued show cause notice on 29.3.2004 directing them to pay an interest of Rs. 64,927/-under Section 11AB of the Central Excise Act, 1944. The appellants contested the show cause notice on two grounds, (i) interest is not payable by them relying upon Larger Bench decision in the case of CCE, Delhi-III, Gurgaon v. Machino Montell (I) Ltd. reported at , and (ii) taking plea of time bar. The Adjudicating Authority confirmed the demand of interest of Rs. 64,927/-. On an appeal the appellate authority also concurred that with the views of the adjudicating authority and upheld the Order-in-Original. Hence, this appeal.
3. Learned D.R. submits that the provisions of Section 11AB are very clear and that the interest has been calculated from 11.5.2001 and they are not demanding any interest for the earlier period.
4. Considered the submissions made by both sides and perused the records. I find that the show cause notice issued to the appellants is for demand of interest under Section 11AB of Central Excise Act, 1944.
It is admitted fact that the appellants had paid differential duty on their own for the period 1.4.2001 to 1.4.2003. In order to appreciate the demand of interest from them it is required that the provisions of Section 11AB has to be read which are as under: Section 11AB. Interest on delayed payment of duty.-(1) Where any duty of excise has not been levied or paid or has been short-levied or short paid or erroneously refunded, the person who is liable to pay the duty as determined under Sub-section (2), or has paid the duty under Sub-section (2B), of Section 11A, shall, in addition to the duty, be liable to pay interest at such rate not below eighteen per cent, and not exceeding thirty-six per cent. Per annum, as is for the time being fixed by the Central Government, notification in the Official Gazette, from the first date of the month succeeding the month in which the duty ought to have been paid under this Act, or from the date of such erroneous refund, as the case may be, but for the provisions contained in Sub-section (2), or Sub-section (2B), of Section 11A till the date of payment of such duty: Provided that in such cases where the duty becomes payable consequent to issue of an order, instruction or direction by the Board under Section 37B, and such amount of duty payable is voluntarily paid in full, without reserving any right to appeal against such payment at any subsequent stage, within forty-five days from the date of issue of such order, instruction or direction, as the case may be, no interest shall be payable and in other cases the interest shall be payable on the whole of the amount, including the amount already paid.
From the plain reading of above Section it is very clear that the person who is liable to pay the duty under Section 11A should in addition to the duty is liable to pay interest. I find that the appellants have paid the duty taking recourse to the Section (2B) of Section 11A which reads as under: (2B) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person, chargeable with the duty, may pay the amount of duty before service of notice on him under Sub-section (1) in respect of the duty, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under Sub-section (1) in respect of the duty so paid: Provided that the Central Excise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of "one year" referred to in Sub-section (1) shall be counted from the date of receipt of such information of payment.
From the plain reading of Sub-section (2B) it is very clear that the appellants can pay the duty short paid by them on their own, and this situation is also precisely covered by provisions of Section 11AB in its Sub-section (1) which requires an assessee to pay the interest along with duty payable by them.
5. In respect of the decision of the Larger Bench of the Tribunal in the case of Machino Montell, I find that, that case is not applicable in this matter inasmuch as in those cases the department issued the show cause notice to the assessee for confirmation of the demand under Sub-section (2) of Section 11 A, and the assessee had paid the duty before issuance of show cause notice. Ratio of that judgment may have been applicable had there been any confirmation of duty of demand. I find, in this case, that the order-in-appeal is only confirming the amount of interest and not any demand. Hence, the ratio of the Larger Bench in this case is not applicable.
6. In view of the above fact and circumstances, I find no reason to interfere with the Order-in-Appeal. Appeal dismissed.