2012 (12) TMI 548 - AT - Central Excise

Provisional assessment - whether the respondents are liable to pay interest on finalization of the assessment if the differential duty has been paid before the finalization of the assessment Held that - Assessee is not liable to pay interest on the differential duty paid by them before the finalization of the provisional assessment

Summary

Issues:
Appeal against order setting aside confirmed demand in provisional assessment case; Liability to pay interest on finalization of assessment in case of provisional assessment.

Analysis:

Issue 1: Appeal against order setting aside confirmed demand in provisional assessment case
The appeals were filed by the Revenue against the impugned order passed by the Commissioner (Appeals) where the demand confirmed by the adjudication order was set aside. The respondents also filed Cross Objections to the appeals. The Hon'ble High Court of Bombay in the case of Ispat Industries Ltd. held that the assessee is not liable to pay interest on the differential duty paid before the finalization of the provisional assessment. This view was upheld by the Hon'ble Supreme Court in the Special Leave Petition (SLP) filed by the Revenue against the decision of the Hon'ble High Court. Consequently, the impugned order setting aside the confirmed demand was upheld, and the appeals filed by the Revenue were dismissed.

Issue 2: Liability to pay interest on finalization of assessment in case of provisional assessment
The key issue in the matter was whether the respondents were liable to pay interest on finalization of the assessment in the case of provisional assessment, given that the differential duty had been paid before the finalization of the assessment. The Commissioner (Appeals) referred to relevant case laws, including the decision of the CESTAT and the judgments of the Hon'ble Bombay High Court and the Hon'ble Supreme Court. It was noted that since the appellants had paid the differential duty before the finalization of the provisional assessment, they were not liable to pay any interest. The Commissioner relied on precedents and held that the decision in the case of Ispat Industries Limited was fully applicable to the facts of the present case. The Hon'ble CESTAT, Mumbai, in earlier orders, had also decided the issue in favor of the appellants based on the judgment of the Hon'ble Bombay High Court in the case of Ispat Industries Limited. Therefore, the liability to pay interest on finalization of the assessment in the case of provisional assessment was determined in favor of the respondents based on established legal precedents and judgments.

In conclusion, the appeals were disposed of by a common order, upholding the impugned order setting aside the confirmed demand in the provisional assessment case. The liability to pay interest on finalization of the assessment in the case of provisional assessment was decided in favor of the respondents based on the legal principles established by the Hon'ble High Court and the Hon'ble Supreme Court.