CCE Vs. TELCO

JUDGEMENT

(1.) THE short point involved in this case is with respect to the interpretation of Section 11AB of the Central Excise Act, 1944 relating to the liability to pay interest on the amount of duty as determined and held payable in terms of the adjudication earlier held under Section 11A of the Act. Vide judgment dated 23rd July, 1999 the Customs, Excise 8s Gold (Control) Appellate Tribunal (CEGAT), Eastern Bench, Calcutta, Set aside that part of the order impugned before it whereby penalty was imposed upon the respondent. But in course of the aforesaid judgment of the Tribunal, the question relating to the imposition of interest was not dealt with. Accordingly, the respondent filed a Review Application (calling, it a miscellaneous application for rectification of the mistake) and the Tribunal vide order dated 8.2.2001 while referring to Section 11AB of the Act held that since the period for which the duty in question was held to be payable was between 1.4.1989 to 30.6.1995, which was not covered by Section 11AB of the Act, the respondent was not liable to pay interest on the said amount of Duty determined and payable.

(2.) IN the present application, the Revenue wants us to frame the following question for law for our adjudication. Consequent to insertion of Section in 11AB CEA 44 whether in an order of Adjudication where duty payable is determined for the first time after the insertion of Section 11AB, the Adjudicating Authority would now be empowered to levy interest under Section 11AB upon the duty determined to be payable by the assessee or not even for evasion of duty taking place in the past prior to insertion of Section 11AB. Section 11AB reads thus:

(3.) SECTION 11AB was added in the Central Excise Act, 1944 by the medium of insertion of Finance (No. 2) Act, 1996 and this insertion was made effective from 28.9.1996. Sub -section (2) of Section 11AB clearly and categorically declares that the provisions of Sub -section (1) would not apply to the cases where it became payable before the date on which the aforesaid Finance Act No. 2 of 1996 received the assent of the President. Undoubtedly, Therefore Sub -section (2) of Section 11AB makes the applicability of Sub -section (1) prospective in nature.