CCE Vs. SPIC PHARMACEUTICALS DIVISION

JUDGEMENT

(1.) IN this appeal, filed against the order passed by the Commissioner (Appeals), the department is aggrieved by:

(2.) AFTER hearing both sides and considering their submissions, I find that, though in the body of the impugned order, it was held that Modvat credit was not admissible to the assessee in respect of protective coatings, learned Commissioner (Appeals), in the operative part of his order, left out the said goods, with the result that the conclusive part of the order allowed Modvat credit on protective coatings. If the words, 'protective coatings' are inserted in the appropriate place in the conclusive sentence of the impugned order, the anomaly will get remedied. Fortunately, there is consensus between the two sides for this remedial measure. Accordingly, the conclusive sentence of the impugned order is ordered to be read as under:

(3.) THE show -cause notice did not expressly invoke Section 11AA of the Central Excise Act for levying interest from the assessee on inadmissible Modvat credit amounts. The original authority held that the assessee was liable to pay interest on such amounts in terms of Section 11AA. However, the Commissioner (Appeals) vacated the demand of interest on the ground that it was beyond the scope of the show -cause notice. According to the appellant, where duty liability was determined by the competent authority under Section 11A of the Act, the liability to pay interest on the duty amount so determined for the period specified under Section 11AA is automatic. The SDR has reiterated this plea and has claimed support from the Supreme Court's judgment in Commissioner of Trade Tax (U.P.) v. Kanhai Ram Thekedar 2005 -TIOL -76 -SC -CT. Learned Counsel for the respondents has contested this argument, on the strength of the Madhya Pradesh High Court's judgment in Commissioner v. Tirupati Steel Industries . Learned Counsel has raised a more fundamental contention, which is to the effect that Section 11AA is not applicable to the facts of this case. After consulting the provisions of Section 11AA, I accept this contention. Sub -section (2) of Section 11AA reads as under: