Ms. Jyoti Balasundaram, Vice President : The Revenue is in appeal against the order of the Commissioner (Appeals) who has set aside the levy of interest and imposition of penalty on the assessees herein — the setting aside is on the ground that differential duty paid by the assessees was available to assessees themselves in another factory and therefore intention to evade payment of duty cannot be alleged for the purpose of holding that the assessees are liable to penalty and interest. He has also relied upon the fact that the differential duty has been paid before the issue of show-cause notice to hold that penalty cannot be sustained.

2. We have heard both sides. The payment of the amount before issue of the show-cause notice is no longer a ground to hold that penalty and interest are not sustainable. However, the availability of differential duty as credit to the assessees themselves is certainly a ground for holding that they cannot be guilty of any intention to evade payment of duty. The decision of the apex Court in Autolite (India) Ltd. Vs. CCE, Jaipur - 2003 (154) ELT A169 (SC), relied upon by the Revenue in the appeal is distinguishable for the reason that, in that case, the credit was not available to the assessees themselves but to another assessee and it is in this context that apex Court held that revenue neutrality situation did not arise. However, in the present case, it is the assessee himself who is eligible to take the credit on the differential duty paid by him. As regards interest, we see merit in the submission of the learned counsel for the respondents that they are not liable to pay interest in terms of provisions of clause 2 of Section 11AB for the reason that the duty in this case was payable prior to 11.5.2001 which is the date of enactment of the Finance Act, 2001 introducing Explanation to Section 11AB. The fact that the assessments were also provisional is a further ground for holding that the assessees are not liable to pay interest or penalty. In the result, we uphold the impugned order and reject the appeal. The cross-objection which is in the nature of comments upon/reply to the Revenue's appeal is also dismissed.