Customs, Excise and Gold Tribunal - Calcutta
Carter Hydraulic Power Pvt. Ltd. vs Commissioner Of Central Excise on 25 January, 2008
ORDER D.N. Panda, Member (J)
1. This appeal involves a very short question that whether interest on the defaulted amount of duty shall be payable at the rate of 13% as informed under Notification No. 66/2003-CE dated - 12/9/2003 or at any different rate that was contemplated in the order of adjudication.
2. The Ld. Counsel appearing for the appellant states that the rate of interest applicable to the defaulted amount of duty being notified under Section 11AB of the Central Excise Act, 1944 and as prescribed by Notification No. 66/2003-CE dated-12/9/2003, there cannot be any arbitrary demand at any different rates. So far as the penalty of Rs. 10,000/- was concerned, it was his submission that the learned Authorities without coming to the conclusion whether there should be levy of penalty and without any discussion in the order, ipso facto levied the penalty. Therefore, the penalty may be waived at the interest of justice and the interest may be directed to be demanded at the rate notified.
3. The Ld. JDR appearing for the Revenue fairly submitted that if there is statutory mandate, the order of adjudication should not travel beyond that. Therefore, the rate of interest applied invoking Rule 83 of the Central Excise Rules, 1944 was proper since there was no levy of interest under Section 11AB of the Central Excise Act, 1944.
4. Heard both sides and perused the record. There is no dispute by the Ld. Counsel that there was a default in payment by the days of delay as per order and interest was leviable being mandate of the statute. But the authorities having traveled beyond the statutory mandate that is to be restricted to the statutory limit as prescribed by aforesaid Notification. Perusal of Section 11AB of the Central Excise Act, 1944 shows that interest on delayed payment of duty is mandate of that section itself and a minimum of rate of interest as well as maximum rate are laid down by the statute. Flexibility in between that was domain of Central Govt. to notify in respect of the rate of interest. The Central Govt. having exercised such power, the rate of 13% fixed by the Notification aforesaid should be applied. Therefore, direction to pay the demand of duty beyond the stipulated period with interest @ 13% for the default period, shall meet end of justice. Therefore, the impugned order is liable to be modified to such extent and the interest of 13% on the defaulted amount should be realisable.
5. So far as the penalty is concerned, there is no whisper in the order showing the reason why penalty was leviable and even there is no reasoning in the order calling for penalty. As such, the levy appears to be irrational. Accordingly, the penalty levied is waived.
6. Appeal is allowed in the terms aforesaid.
(Dictated and pronounced in the open Court)