- (1.) THIS writ petition seeks quashing of letter dated 19.8.2005, Annexure P-2 requiring the petitioner to pay interest for the delayed payment of the Central Excise Dues.
(2.) CASE of the petitioner is that it took a rolling mill on lease for the period from 1997 to 2000 and manufactured re-rolled non-alloy steel products. On 1.9.1997, Compounded Levy Scheme was introduced by way of Section 3-A of the Central Excise Act 1944 (for short, the Act). The petitioner opted for compounded levy under Rule 96ZP of the Central Excise Rules, 1944 (for short, 'the rules'). On expiry of period of lease, the petitioner surrendered its registration certificate on 1.6.2000. Thereafter on 19.8.2005, the impugned notice was issued to the petitioner demanding interest for the delayed payment of duty for the period 1997-2000. Learned counsel for the petitioner submitted that since the compounded levy scheme had come to an end, liability incurred thereunder by the petitioner did not survive. Reliance has been placed on judgment of the Hon'ble Supreme Court in M/s. Rayala Corporation (P) Limited and Mr. Pratap v. Director of Enforcement, New Delhi, 1969(2) SCC 412 and Kolhapur Canesugar Works Limited v. Union of India, 2000(2) RCR(Civil) 674 (SC) : 2000(119) ELT 257 (SC), for the proposition that omission of a provision does not amount to repeal and does not attract Section 6 of the General Clauses Act, 1897, which is an exception to the general rule that deletion of a provision brings all proceedings to an end unless a saving clause is enacted.
(3.) IT was next submitted that demand of interest has to be made within reasonable period and after expiry of reasonable period, the demand must be held to be barred by limitation. Reliance has been placed on judgments of the Hon'ble Supreme Court in Government of India v. Citedal Fine Pharmaceuticals, 1984(42) ELT 515 and Commissioner of Trade Tax, Lucknow v. Kanhai Ram Thekedar, 2005(185) ELT 3 (SC). In the reply filed, stand is that the partners of the petitioner firm gave affidavit dated 26.6.2000 undertaking to pay Central Excise Duty along with interest and last payment of duty was deposited by the petitioner on 31.3.2003. Thereafter, demand notice in respect of interest was given within less than three years.;