2018 (6) TMI 918 - AT - Central Excise

Liability of Interest on duty paid during provisional period - whether the appellant is liable to pay interest in respect of duty paid during the period of provisional assessment and the assessment is finalized subsequently? - Held that - The issue is no more res-integra and is decided in the case of COMMISSIONER OF C. EX., NAGPUR VERSUS ISPAT INDUSTRIES LTD. 2010 (10) TMI 178 - BOMBAY HIGH COURT , where it was held that looking to the provisions of Rule 7(4) it is clear that the appellant could not be held liable to pay the interest if the differential duty and the duty amount have been paid prior to the final assessment - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Whether the appellant is liable to pay interest in respect of duty paid during the period of provisional assessment and the assessment is finalized subsequently.

Analysis:
The issue in this case revolves around the liability of the appellant to pay interest on duty paid during provisional assessment when the final assessment is completed later. The appellant's counsel, Ms. Anjali Hirawat, argued that this issue has been settled in various judgments, including those of the Hon’ble Supreme Court, citing cases such as Ispat Industries Ltd., Tata Motors Ltd., and CEAT Ltd. On the other hand, the Revenue representatives reiterated the findings in the impugned order.

Upon careful consideration, the Tribunal found that the issue is no longer res integra, as it has been conclusively decided in previous judgments. Specifically, reference was made to the case of Ispat Industries Ltd., which was upheld by the Hon’ble Bombay High Court and subsequently by the Hon’ble Supreme Court. The Tribunal noted that if the duty and differential duty have been paid before the final assessment as per Rule 7(4), the appellant cannot be held liable to pay interest. The Tribunal allowed the appeal subject to factual verification by the concerned Commissionerate.

The Hon’ble High Court upheld the Tribunal's decision, emphasizing that interest under Rule 7(4) of the Central Excise Rules is payable from the first day of the month succeeding the month for which the amount is determined by final assessment till the date of payment. Since the differential duty was paid before the final assessment, the court held that the appellant is not liable to pay interest. The court ruled in favor of the assessee and against the revenue, disposing of the appeal without costs.

In light of the precedents and legal principles discussed in the judgments cited, the Tribunal concluded that the issue is no longer in dispute. Consequently, the impugned orders were set aside, and the appeals were allowed. The judgment was pronounced in court on 24.05.2018.