AIA ENGINEERING PVT. LTD. Vs. CCE

JUDGEMENT

(1.) THIS appeal has been filed by appellant M/s. AIA Engineering Ltd. Ahmedabad against OIA No. 389/2009(Ahd -II)CE/CMC/Commr(A)/Ahd, dt.19.11.2009. The issue involved in these proceedings is whether appellant is required to pay interest on a short levy for the period 1998 -1999 and 1999 -2000 under Section 11AB of the Central Excise Act 1944 when appellant paid the short levy voluntarily without being pointed out by the Revenue.

(2.) SHRI P.M. Dave (Advocate) appearing on behalf of the appellant argued that appellant cleared a Coal Mill System, falling under CETH 8479.90 to Gujarat Electricity Board and Maharashtra Pradesh Electricity Board during the period involved and a royalty @ 6.5% on material cost charged by the appellant was not included in the assessable value. That appellant voluntarily paid differential duty on 22.12.2000 and 17.05.2001. That Department started inquiring into the case only as per statement dt.02.08.2001 of Shri Bindesh Indravadan Shah and Shri Nityanand N. Dhokakia, Excise Officer and the General Manager (Co -ordination) of the appellant. That Commissioner (Appeals) in Para 10 of the OIA dt.19.11.2009 has wrongly mentioned that amounts were paid after being pointed out by the Department. It was his case that for the period involved interest if any can be demanded only under the unamended Section 11AB of the Central Excise Act 1944 which was applicable to the case involving fraud, mis -statement, suppression etc with intention to evade Central Excise duty. That in the present case of the appellant there is no such elements as no mandatory penalty has been imposed upon the appellant by the adjudicating authority. That in the present case the demand for interest is also time barred as being issued on 17.09.2003 for the demand voluntarily paid on 22.12.2000 and 17.05.2001. Ld. Advocate relied upon the following case laws in support of his arguments: -

(3.) HEARD both sides and perused the case records. In this appeal the disputed amount of differential duty was pertaining to the period prior to 11.05.2001 when unamended Section 11AB was applicable. Sub -section (2) of Section 11AB after amendment and effective from 11.05.2001 also had a clause that nothing contained in the amended Section will apply to cases where duty had become payable or ought to have been paid before the date on which the Finance Bill receives the assent of the President. Hon'ble High Court of Gujarat in the case of Exotic Associates Vs CCE (supra) has held in Para -18, reproduced below, that interest for the period prior to 11.05.2001 can be recovered only under the unamended Section 11AB and not under the amended Section 11AB of the Central Excise Act 1944. In the present proceedings the period of demand is prior to 11.05.2001, therefore, it has to be examined whether interest is demandable from the appellant in the light of unamended Section 11AB as it existed prior to 11.05.2001. It is observed from the unamended Section 11AB that the same was applicable to cases of short levy or non levy etc by reason of fraud, collusion or willful mis -statement or suppression of facts or contravention of any provision of Central Excise Act or Rules with intent to evade payment of duty. It is the case of the Revenue that extended period is invokable once the disputed amount has been paid whereas appellant is of the view that it is not a case of invokation of extended period as no penalty under Section 11AC of the Central Excise Act 1944 has been imposed upon the appellant by the adjudicating authority in the remand proceedings.