THE COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VISAKHAPATNAM-II COMMISSIONERATE VISAKHAPATNAM Vs. M/S. ANAM ELECTRICAL MANUFACTURING CO.

JUDGEMENT

(1.) IN these appeals filed by the department, the short question rising for consideration is whether, on the differential amount of duty paid by the respondent (hereinafter referred to as the assessee), interest under Section 11AB of the central Excise Act is recoverable for the period from the date of clearance of the goods to the date of payment of differential duty. It is not in dispute that the assessee originally paid duty on the goods in terms of the price originally agreed with the buyers. Subsequent to the clearance of the goods, apparently, the price escalation clause of the contract was invoked and the seller and the buyer agreed for an increase. The assessee (seller) issued supplementary invoices for the purpose of collecting the differential price and paying differential duty. The differential duty was voluntarily paid and this fact was intimated to the department. The relevant show -cause notices were issued for recovery of interest under Section 11AB of the Act on the differential duty for the period from the date of clearance of the goods to the date of payment of differential duty. The demand was contested. The adjudicating authority dropped the demand of interest. The orders -in -original were reviewed in the department and appeals filed with the Commissioner (Appeals). The appellate authority dismissed the department's appeals. Hence the present appeals before the Tribunal. The learned counsel for the respondent raises a preliminary objection at the outset by submitting that these appeals are not maintainable as they infringe the National Litigation Policy. It is submitted that, as per the said Policy, the department cannot prefer to the Tribunal any appeal involving total revenue exceeding Rs.1 lakh.

(2.) THE learned Superintendent (AR), relying on case law submits that the substantive issue is no longer res integra. The decisions cited by her are (i) Commissioner vs. SKF India Ltd. : : 2009 (239) E.L.T. 385 (S.C.), (ii) Commissioner vs. International Auto Ltd.:, 2010 (250) E.L.T. 13 (S.C.) and (iii) Commissioner vs. Presscom Products : : 2011 (268) E.L.T. 344 (Kar.).Though the learned counsel has not cited any binding decision to the contra on the issue, she has raised the plea of limitation against the demand of interest. In this connection, she has claimed support from the Tribunal's decision in Emco Ltd. vs. Commissioner :, 2011 (272) E.L.T. 136 (Tri. -Mumbai) wherein, relying on a judgment of the apex court, the Tribunal held that any demand for recovery of interest should be raised within one year. Before parting with the matter, the learned counsel has also referred to para 19 of the High Court's judgment in the Presscom Products case, drawing support to her preliminary plea based on National Litigation Policy. In her rejoinder, the learned Superintendent (AR) opposes the plea of limitation and relies on ASN Steel Tubes Ltd. vs. Commissioner : : 2011 (265) ELT 127 (Tri. -Del.).

(3.) THE ancillary issue raised before me is whether the demand of interest in this case is liable to be held time -barred in view of the Tribunal's decision in the case of Emco Ltd. (supra). In that case, a view was taken to the effect that, in the absence of any period of limitation having been prescribed in the Central Excise Act for recovery of interest on duty under Section 11AB of the Act, a period of one year could be adopted as reasonable period of limitation. Section 11AB provides for recovery of interest on an amount of duty determined under sub -section (2B) of Section 11A. It however does not prescribe any period of limitation for the purpose of recovery of such interest. In my considered view, this is because the liability to pay interest on duty is co -extensive with the liability to pay the duty itself. In other words, it is a continuing liability. Where the liability is a continuing liability, the statute may not prescribe a period of limitation. This apart, there are judgments of the apex court to the effect that interest on tax is automatic. If the tax is not paid on or before the due date, interest thereon will accrue to the revenue. The cumulative effect is that the department is entitled to demand interest on an amount of duty at any time till such interest is paid by the assessee. In my humble opinion, the view taken on this point by this Tribunal in the case of Emco Ltd. is per incuriam and cannot be followed as a precedent.