ORDER
V.K. Agrawal, Member (T)
1. This is an application filed by M/s. Indian Refrigeration Industries for rectification of mistake in Final Order No. 403, 2002-B, dated 20-9-2002.
2. Shri C. Hari Shankar learned Advocate submitted that the Applicants has two factories, one located at Kirti Nagar, New Delhi and the other at Faridabad; that the Director General of Technical Development granted licence dated 2-7-79 and 16-1-80 to Faridabad unit for manufacture of two types of products; that subsequently, with the increase in the limit of investment for registration as an SSL, Faridabad unit applied for registration as Small Scale Unit which was granted to them by the Commissioner of Industries on 14-6-1990; that the Commissioner, however, denied the benefit of small scale exemption under Notification No. 175/86-C.E., dated 1-3-86 for the period 1-4-86 to 30-6-88; that the Tribunal vide Final Order No. 780/2000-B, dated 11-5-2000 [2000 (121) E.L.T. 174 (T)] confirmed the demand for the period prior to 31-8-87 but dropped the demand thereafter on the ground of SSI registration granted to a unit which had applied for it would date back to the date of application; that through Civil Appeal No. 4285/2000 they challenged the said Final Order No. 780/2000-B, dated 11-5-2000 of the Tribunal and the Appeal was dismissed by the Supreme Court on 31-3-2002 [2001 (128) E.L.T. A65 (S.C.)]. He, further mentioned that Deputy Commissioner, under Letter dated 8-1-2001 directed them to deposit Rs. 4,10,475/- along with penalty of Rs. 25,000/- allegedly on clearance affected by them prior to 31-8-87 along with the interest of 24% leviable with effect from May, 1995 till the payment of duty as per provisions of Sections 11A/11AA of the Central Excise Act; that the Deputy Commissioner enforced the entire bank guarantee of Rs. 6,10,788.87 submitted by them and also wrote a letter on 26-3-2001 directing them to deposit Rs. 3,89,142/- remained to be paid; that on filing of Appeal against the letter dated 26-3-2001, the Commissioner ordered appropriation of the duty amount of Rs. 4,10,475/- and penalty of Rs. 25,000/-from the Bank guarantee and directed that interest under Section 11AA would be worked out from 2-5-91 to 1-5-2000; that the Appellate Tribunal under Final Order No. 403/2000-B dated 20-9-2002 has upheld the demand for interest from them for the period 2-5-91 to May, 1995 and dropped the demand for the period thereafter.
3. Learned Advocate, further, submitted that the Tribunal however, has overlooked the contentions of the Applicants to the effect that Section 11AA was not applicable to the present case and that, if at all interest in cases where wilful suppression and mis-statement has been alleged, could be demanded only under Section 11AB which did not apply to demand pertaining to period prior to Finance Act, 1966; that this oversight constitutes an error apparent on the face of the Order meriting rectification.
4. We also heard Shri J. Singh, learned Departmental Representative.
5. We observe from the perusal of the Final Order No. 403/2002-B dated 20-9-2002 that the Tribunal had set aside the demand of interest for the period from 2-5-91 to May, 1995 as the same was not demanded in the show cause notice and the Commissioner (Appeals) had exceeded his jurisdiction. The demand for interest was, however, upheld for the period subsequent to May, 1995. A perusal of the Appeal papers reveals that the Applicants had made the submissions that Section 11AA was not applicable since the demand had been confirmed on the ground of mis-representation and suppression invoking the extended period of limitation and interest in such circumstances may be demanded only under Section 11AB. It was also mentioned that where the amount becomes payable prior to the Finance Act, 1996, no interest could be demanded. Section 11AA of the Central Excise Act was inserted with effect from 26-5-95 in the Central Excise Act by Section 73 of Finance Act 1995 which provides that subject to the provisions contained in
Section 11AB where a person fails to pay the duty within three months from
the date of determination under Section 11A (2), he shall pay interest as fixed
by the Board from the date immediately after the expiry of three months till
the date of payment of duty. Section 11AB was inserted with effect from 28-9-
96 by Section 76 of the Finance (2) Act, 1996. This Section provides that where
no duty of excise has been levied or paid or has been short levied or short
paid by reason of fraud, wilful misstatement or suppression of facts etc. the
person liable to pay duty shall be liable to pay interest from the first day of
the month succeeding the month in which the duty ought to have been paid
till the date of final payment of such date. We do not agree with the learned
Advocate that there was any mistake in confirming the demand of interest
from the Applicants with effect from June, 1995 as the interest can be demanded by the Department under Section 11AA in respect of duty confirmed
invoking the extended period of limitation. Section 11AB of the Act further,
provides for charging the interest in respect of cases where extended period
of limitation is invoked from the first date of the manufacture succeeding the
month in which the duty ought to have been paid. Section 11AB, in our view,
does not exclude the operation of Section 11AA in the cases of demand of
duty on account of fraud, collusion, etc. As the demand of interest has been
confirmed after May, 1995 when the provisions of Section 11AA was on the
Statute Book, no mistake is there on the face of the record. Accordingly the
application is rejected.