(A.K. Sikri and Rohinton Fali Nariman, JJ.)
Commissioner of Central Excise, Bangalore ______ Appellant
v.
M/s. Toyota Kirloskar Motors, Bangalore _________ Respondent
Civil Appeal No. 2063 of 2007, decided on September 30, 2015
The Order of the court was delivered by
Order
1. There was short payment of excise duty by the respondent-assessee. The said shortfall was made good by the assessee, though belatedly. For this delayed period, the Revenue imposed interest under Section 11AB of the Central Excise Act, 1944 (hereinafter referred to as ‘Act’). After the issuance of show cause notice, Order-in-Original was passed. However, the High Court set aside the Order-in-Original relying upon the judgment in the case of ‘CCE, Mangalore v. Sri Krishna Pipes Industries Limited [2004 (165) ELT 508].
2. The aforesaid judgment has been overruled by this Court in ‘Union of India v. Dharamendra Textile Processors’ [2008 (13) SCC 369].
3. We further find that in the Order-in-Original passed by the Adjudicating Authority, the demand of interest was confirmed in the following manner:-
“It is the plea of the assessee that since they have paid the differential duty before issue of the Show Cause Notice, they are not liable to pay any interest in terms of Section 11A(2B) of the Central Excise Act, 1944. Section 11A(2B) of the Central Excise Act, 1944, reads as follows: “Where any duty of excise has not been levied or paid or has been short-levied or erroneously refunded, the person, chargeable with the duty, may pay the amount of duty before service of notice on him under sub-section (1) in respect of the duty, and inform the Central Excise Office of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid”. Explanation 2 to the above section very clearly states that “For the removal of doubts, it is hereby declared that the interest under section 11AB shall be payable on the amount paid by the person under this sub-section and also on the amount of short payment of duty, if any, as may be determined by the Central Excise Office, but for this sub-section”. Even in terms of Section 11AB of the Central Excise Act, 1944, interest is liable to be paid by the person who has paid the duty under sub-section (2B) of Section 11A. I therefore find that issue of Show Cause Notice to the assessee was not required in terms of the above provisions of the Central Excise Act. However, notwithstanding the fact that the assessee has paid the differential duty before issue of the show cause notice, interest in terms of Section 11AB is liable to be charged on the assessee.”
4. The aforesaid discussion interprets the provision of Section 11A(2B) of the Central Excise Act, 1944, correctly. As a result, the impugned judgment of the High Court is set aside and the interest which is levied upon the respondent-assessee is maintained by allowing this appeal.
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