CCE Vs. KOTHARI SUGARS AND CHEMICALS LTD.

JUDGEMENT

(1.) IN adjudication of a show -cause notice dated 2.5.2003, the original authority confirmed against the respondents a demand of differential duty of Rs. 2,22,087/ - for the period April 1998 to February 2003, by invoking the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act. The authority, however, dropped the proposals for levy of interest on duty and imposition of penalty, after noting the fact that the entire amount of duty had been paid prior to the issuance of the show -cause notice. The Department preferred appeal to the Commissioner (Appeals) against the non -levy of interest and the non -imposition of penalty, but that appeal was dismissed by the appellate authority. Hence the present appeal.

(2.) LEARNED SDR, reiterating the relevant grounds of the appeal, submitted that learned Commissioner (Appeals) ought to have ordered levy of interest on duty at least for the period from 11.5.2001, having regard to the provisions of Sub -section (2B) of Section 11A [along with Explanation 2] of the Central Excise Act. Referring to the case law relied on by the lower appellate authority, learned SDR pointed out that the periods of dispute in those cases were prior to 11.5.2001 and hence those decisions were not applicable to the instant case. It was argued that the ruling that, where duty was paid prior to issue of show -cause notice, no interest under Section 11AB was leviable thereon, was not applicable on or after 11.5.2001 on account of the amendments brought to Section 11A. A decision of the Tribunal or any Court made in terms of any law prior to its amendment could not be made applicable to any case falling under the amended law. In support of this proposition, learned SDR relied on the Supreme Court's judgment in Collector v. Alnoori Tobacco Products .

(3.) LEARNED Counsel for the respondents was of the view that, by invoking Sub -section (2B) of Section 11A, the appellant was travelling beyond the scope of the show -cause notice. In this context, reliance was placed on the Supreme Court's judgment in Saci Allied Products Ltd. v. Commissioner , wherein it was held that the Tribunal could not sustain case of Revenue against assessee on a ground not raised by Revenue in the show -cause notice. After giving careful consideration to the submissions, I find that the only dispute in this appeal is whether interest under Section 11AB is liable to be levied on the amount of duty paid by the respondents, for the period from 11.5.2001. It is not in dispute that the amount of duty was paid by the assessee prior to issuance of the show -cause notice. In the case of Ashok Leyland Ltd. v. Commissioner 2003 (156) 995 (Tri. Chennai) cited by learned Counsel, it was held that, where duty was paid prior to issuance of the show -cause notice, any interest on duty was not leviable under Section 11AB. The period of dispute in that case was October 1999 to March 2000. A similar view was taken in Commissioner v. Jkon Engg. (P) Ltd. and EID Parry (I) Ltd. v. Commissioner . In both these cases also, it appears, the payment of duty was for a period prior to 11.5.2001. In the present case, the payment of duty was for the period April 1998 to February 2003 and the appellant has not insisted on levy of interest on the duty amount paid for the period prior to 11.5.2001. Admittedly, for the latter part of the period [11.5.2001 to. February 2003], the payment of duty should be deemed to have been made in terms of Sub -section (2B) of Section 11A of the Act. Explanation 2 to this sub -section reads as under: