The judicial precedent plays a crucial role in clarifying the law when the statute is not clear, as in the case of the demand for interest on delayed payment of Central Excise Duty. Although the Central Excise Act, 1944 provides for the recovery of interest under Section 11AA, it does not specify a time limit for the recovery of interest. In the absence of a time limit, the authority should take recourse within a reasonable period. The question then arises as to what constitutes a reasonable period for the recovery of interest on delayed payment of Central Excise Duty. The answer to this question is as follows:

1. The demand for interest can only be made if there is a demand for duty against the party. Section 11A prescribes a one-year (proposed two-year) time limit for the demand of central excise duty, and in exceptional circumstances falling under the proviso to Section 11A(4), the time limit is five years. The courts and tribunals have answered this question through judicial pronouncements, observing that the period of limitation that applies to a claim for the principal amount should also apply to the claim for interest, unless otherwise stipulated by the statute.
2. The Supreme Court held in the Commissioner Vs TVS Whirlpool Ltd [2000 (119) ELT A 177 (SC)] that it is reasonable for the period of limitation that applies to a claim for the principal amount to also apply to the claim for interest thereon.
3. The Delhi High Court in the matter of Kwality Ice Cream Company Vs Union Of India [2012 (281) ELT 507 (Del.)] followed the judgment of the Supreme Court in the TVS case and held that the period of limitation prescribed for the demand of duty under Section 11A would normally be one year, and the same period of limitation would apply to the demand for interest.
4. The High Court of Punjab & Haryana at Chandigarh in the matter of CCE Vs VAE VKN Industries Pvt Ltd. [2005 (322) ELT 269 (P & H)] relied on the judgment of Kwality Ice Cream and held that the department had no jurisdiction to issue a show cause notice after the expiry of the period of limitation for interest on delayed payment, which should be within one year as stipulated under Section 11A of the Act.
5. The High Court of Punjab & Haryana at Chandigarh in the matter of Jai Bharat Maruti Ltd Vs CCE, Delhi-III [2014 (307) ELT 282 (P & H)] also relied on the judgment of Kwality Ice Cream and held that the period of one year would apply to the case.
6. The CESTAT, Principal Bench, New Delhi, in the matter of Pahwa Chemicals Pvt Ltd Vs CCE, Delhi-IV [2014 (311) ELT 205 (Tri. Delhi.)] held that the period of limitation would apply to the demand for interest and found no justification for confirming the interest amount demanded in the year 2006 pertaining to the period of 1998-99.