2017 (7) TMI 628 - AT - Customs

Liability of interest - section 18 of CA - Valuation - palm oil - N/N. 36/2001 dated 03.08.2001 - importer claimed to adopt invoice value and not tariff value - Held that - assessments of crude oil were being done provisionally under the Customs Act. There is no dispute in this regard. The liability of importer to pay interest in provisional assessment, from the first day of the month in which the duty is provisionally assessed, was brought into effect vide an amendment to Section 18 vide Gazette Notification No.35 dated 14.07.2006 - Amended provisions do not provide for any retrospective effect for the new insertion in Section 18. This being so, operatability of the provision will start ticking only from 14.07.2006, on which date the Gazette Notification has been issued. The order of the Assistant Commissioner demanding interest from the importer on the differential duty for the period from the date of provisional assessments till the date of payment of differential duty upheld - appeal dismissed - decided against Revenue..

Summary

Issues:
1. Liability to pay interest on differential duty in provisional assessment.
2. Adjustment of excess paid duty towards short paid duty.
3. Applicability of amended provisions in Customs Act, 1962 regarding interest payment.

Analysis:
1. The case involved the importer, who filed a writ petition in the High Court challenging the adoption of tariff value over invoice value for crude palm oil. Following the dismissal of the petition, the Assistant Commissioner demanded differential duty from the importer based on tariff values. The importer requested to adjust excess payments, which was denied citing lack of provision in customs law. The Commissioner (Appeals) upheld the demand, but the Lower Appellate Authority set aside the order for charging interest on differential duty due to an amendment in the Customs Act. The department appealed against this decision, arguing that interest should be charged. However, the Tribunal found that the liability to pay interest in provisional assessment only applies from the date of the amendment, not retrospectively. Therefore, the department's appeal was dismissed.

2. Another appeal by the importer, regarding the denial of the request to adjust duty demand against refunds, had been decided in favor of the importer previously. This aspect was not revisited in the current judgment.

3. The Tribunal highlighted the amendment to Section 18 of the Customs Act, which introduced the liability to pay interest on amounts payable to the government from the date of final assessment. The amendment did not have retrospective effect and came into force on a specific date. As the provisional assessments in this case were from years prior to the amendment, the Tribunal concluded that the demand for interest on differential duty from the date of provisional assessment was not legally tenable. Therefore, the department's appeal lacked merit and was dismissed.