2017 (5) TMI 1341 - AT - Central Excise

Entitlement to interest on Pre-deposit - finalisation of provisional assessment - whether the amount of Rs. One Crore paid by the respondent, on the directions of ld. Commissioner (Appeals) is to be treated as pre-deposit or an amount of duty, after finalisation of the provisional assessment? - Held that - Section 37 of the CEA, 1944, Clause (2) (ibb) provides for charging or payment of interest on the differential amount of duty which becomes payable or refundable upon finalisation of all or any class of provisional assessments - Admittedly, after assessment was finalised by this Tribunal, the respondent is entitled to claim interest on the excess duty paid by them before finalisation of assessment. As the amount paid by the respondent was during the pendency of finalisation of their provisional assessment and therefore, the same shall be treated as duty and on finalisation of provisional assessment, the respondent is entitled for interest of intervening period of excise duty paid by them - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether the amount paid by the respondent is to be treated as a pre-deposit or an amount of duty after finalization of the provisional assessment?
2. Whether the respondent is entitled to claim interest on the amount paid during the pendency of finalization of the provisional assessment?

Analysis:

Issue 1:
The case involved a dispute regarding the nature of the amount paid by the respondent, whether it constituted a pre-deposit or an actual duty payment after the finalization of the provisional assessment. The respondent had paid an amount of Rs. One Crore as directed by the ld. Commissioner (Appeals) following the finalization of the assessment. The Tribunal held that the amount paid by the respondent before the finalization of the assessment was part of the duty paid by them. The Tribunal referred to Section 37 of the Central Excise Act, 1944, which allows for interest on the differential amount of duty payable or refundable upon finalization of provisional assessments. The Tribunal concluded that the amount paid by the respondent was indeed a duty payment, entitling them to claim interest on the excess duty paid before finalization.

Issue 2:
The second issue revolved around whether the respondent was entitled to claim interest on the amount paid during the pendency of the finalization of the provisional assessment. The ld. AR argued that as it was a pre-deposit, the respondent was not entitled to interest. However, the ld. Counsel for the respondent contended that the payment was indeed a duty payment, citing relevant case law. The Tribunal, after considering the submissions from both sides, upheld the decision of the ld. Commissioner (Appeals) to allow the claim of interest to the respondent for the intervening period of excise duty paid by them. The Tribunal relied on previous judgments and statutory provisions to support its decision, ultimately dismissing the appeal filed by the Revenue.

In conclusion, the Tribunal ruled in favor of the respondent, holding that the amount paid during the pendency of finalization of the provisional assessment was to be treated as duty, entitling the respondent to claim interest on the excess duty paid. The decision was based on a thorough analysis of relevant legal provisions and precedents, ultimately upholding the order of the ld. Commissioner (Appeals) to allow the interest claim to the respondent.