CHAYA INDUSTRIES Vs. COMMISSIONER OF CENTRAL EXCISE, COCHIN

JUDGEMENT

(1.) THIS appeal arises out of and is directed against the Order -in -Appeal No. 453/2002 -C.E., dated 27 -8 -2002 passed by the Commissioner of Customs and Central Excise (Appeals), Cochin.

(2.) SHRI G. Shivadas, learned Advocate appearing for the appellants submitted that the issue relates to levy of interest under Section 11AB of the Central Excise Act, 1944. He said that since there was no intention to evade payment of duty as there was considerable balance in the Modvat account so interest imposed under Section 11AB is not justified. He said that the appellants had removed 03 (three) knitting machines on 19 -10 -1999 to their Tirupur units. They, however on their own, reversed the availed credit to the extent of Rs. 5.54 lakhs on 30 -10 -2000 as against the permissible amount of Rs. 4,19,128/ -. Specifically he emphasised the plea on the ground since the Commissioner (Appeals) has dropped the penalty under Section 11AC, for the same reason, interest under Section 11AB ought to have been set aside. The relevant Sections 11AB and 11AC are as follows - 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 by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, the person liable to pay duty as determined under sub -section (2) of Section 11A shall, in addition to the duty, be liable to pay interest at such rate not below ten per cent and not exceeding thirty per cent per annum, as is for the time being fixed by the Board, from the first day of the month succeeding the month in which the duty ought to have been paid under this Act or the rules made thereunder or from the date of such erroneous refund, as the case may be, but for the provision contained in sub -section (2) of Section 11A, till the date of payment of such duty.

(3.) HEARD Shri L. Narasimha Murthy, JDR, for Revenue who justified the action of the Department in imposing the interest.