2011 (2) TMI 539 - AT - Customs

Demand - Provisional assessment - whether interest is leviable when the provisional assessment was resorted to prior to 13.7.2006 i.e. the date of introduction of sub-Section 18 (3) in the Customs Act 1962 -As regards the decision of the Tribunal in the case of Chemsilk Commerce (P) Ltd vs. Commissioner of Customs (Port) 2008 -TMI - 88885 - CESTAT KOLKATA it has been stated that the relevant order must have been passed prior to 13.07.2006 since the appeal number list the year 2005 - Therefore there was no question of confirmation of demand under Section 18(3) of Customs Act 1962 - Decided in favour of assessee.

Summary

Issues:
1. Levy of interest under Section 18(3) of the Customs Act, 1962 on differential duty paid upon finalization of provisional assessments made prior to 13.7.2006.

Analysis:
The case involved a dispute regarding the levy of interest under Section 18(3) of the Customs Act, 1962 on the differential duty paid upon finalization of provisional assessments made before 13.7.2006. The appellants challenged the demand for interest, which was allowed by the learned Commissioner, leading to the Revenue filing an appeal. The Revenue contended that interest was leviable as per Section 28AB of the Customs Act, 1962, and relied on the decision of the Hon'ble Supreme Court in the case of M/s. Pratibha Processors vs. UOI to support their argument that interest is compensatory in nature and should be imposed on an assessee who withholds payment of any tax. The Revenue also disputed the relevance of certain Tribunal decisions cited by the learned Commissioner.

The Tribunal, in its analysis, considered the provisions of Section 18(3) of the Customs Act, 1962, which was incorporated on 13.07.2006, and the question of whether interest is leviable when provisional assessment was conducted before this date. The Tribunal referred to a previous case involving Sterlite Industries (I) Limited, where it was held that interest cannot be levied on differential duty paid upon finalization of provisional assessments made before 13-7-2006. The Tribunal emphasized that any levy incidental to finalization of a provisional event should be governed by the law in force at the time of the provisional event. Therefore, the Tribunal concluded that no interest could be levied under Section 18(3) of the Customs Act on the differential amounts of duty paid by the appellants upon finalization of provisional assessments conducted before 13-7-2006.

In the present case, the Tribunal found that the issue was similar to the one addressed in the Sterlite Industries (I) Limited case, as the provisional assessment was conducted before 13.7.2006. The Tribunal reiterated that the existence of Section 28AB of the Customs Act, 1962 was considered in the decision-making process. Additionally, the Tribunal emphasized that the specific decisions of the Tribunal interpreting relevant legal provisions are crucial and must be applied. The Tribunal dismissed the Revenue's appeal, stating that it lacked merit and was rejected accordingly. The judgment highlighted the importance of considering the law in force at the time of the provisional event when determining the levy of interest on differential duty paid upon finalization of provisional assessments.