ORDER
M.V. Ravindran, Member (J)
1. The Revenue is in appeal in this matter against the non-imposition of penal interest under Section 11AB of the Central Excise Act, 1944.
2. Learned J.D.R. submits that the Commissioner(Appeals) has erred in not imposing the penal interest on the respondent company under Section 11AB of the Central Excise Act, 1944, as the respondent company has tried to misguide the Department by taking the Credit of the amount in P.L.A. without any TR-6 Challan. Though they may have deposited the money on their own, but this availment of Credit without TR-6 Challan is nothing but a fraudulent way of availing the Credit and seeking clearances.
3. Learned Advocate on the other hand, submits that the adjudicating authority as well as the appellate authority has consistently held that the respondent company has deposited the duty amount on their own and there is no doubt about the bona fides of the respondent company, and this is nothing but a rectification of mistake.
4. Considered the submissions made by both sides and perused the records. I find that the respondents inadvertently took a Credit in their P.L.A., vide Entry No. 44 dated 19.7.97 for an amount of Rs. 1,50,000.00 (Rupees one lakh fifty thousand). The said mistake was detected by the respondents’ Head Office on 28.10.97, and on the same day itself, the amount of Rs. 1,50,000.00 (Rupees one lakh fifty thousand) was paid by the respondent company and it was duly intimated to the concerned authorities. A show cause notice was issued to the respondent company, which on adjudication admitted the fact that this was an error and mistake on the part of the respondent company to avail the Credit without any TR-6 Challan, and on such finding, a token amount of Rs. 10,000.00 (Rupees ten thousand) towards the penalty under Rule 173Q of the Central Excise Rules, 1944, was imposed on the respondents. It was submitted by the learned Advocate for the respondents that this very penalty amount is also paid off by the respondent company. The adjudicating authority did not impose any interest under Section 11AB of the Central Excise Act, 1944, on the respondent company. Even the appellate authority has come to the conclusion that the respondent company’s availment of Credit of Rs. 1,50,000.00 (Rupees one lakh fifty thousand) on 19.7.97 was a mistake, and there is no mala fides in that.
5. The period involved in this case is 1.8.97 to 27.7.97 for which interest has been sought to be claimed under Section 11AB of the Central Excise Act, 1944. During the relevant period the interest which can be imposed on the assessee under Section 11AB was only on a Condition that the duty amount has been demanded and confirmed against the assessee under Section 11A and that also, if the said duty is sought to be evaded with a wilful suppression, misstatement and fraud. Since the amount of duty was paid on their own by the respondent company, there cannot be charge of wilful suppression, misstatement and fraud. Hence the penal interest under Section 11AB of the Central Excise Act, 1944. is not demandable from the respondent company.
6. In view of the above situation, the Department’s appeal is dismissed.
Pronounced in the open court.