PerC.N.B. Nair :

The appellants are manufacturers of Mazza which became liable to Central Excise duty w.e.f. 14.5.97 under the Finance Act. However, they started payment of duty only from 6.6.97. Thus, no payment of duty was made in respect of clearances from 14.5.97 to 5.6.97. The amount of duty not paid worked out to Rs. 3,97,880/- and on 3.11.97 the appellants debited this duty amount in their PLA. All the same a show cause notice dated 13.11.97 was issued to the party. In the adjudication proceedings a penalty equivalent to the duty not paid was imposed under Section 11AC. Interest demand @ 18% was also made under Section 11AB of the Central Excise Act, 1944. The appellant challenges the penalty as well as claim for interest.

2. Even though the case is posted today only for consideration of stay application of the penalty, the Learned Counsel appearing for the appellant submitted that the appeal itself may be disposed of as imposition of penalty and demand for interest are contrary to the legal provisions under which they have been imposed. The Counsel submitted that the appellants paid the duty not paid prior to issue of show cause notice. Section 11AC and 11AB are attracte