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2021 (4) TMI 850 - AT - CustomsInterest on differential duty upon finalization of order-in-original - interest shall have to be reckoned only from the date of provisional assessment till the date of payment thereof and not till the date of order or not - Section 18(3) read with Section 28 AA of the Customs Act - HELD THAT - A reading of sub-section (3) supra makes it clear to me that any such interest could only be charged upto the date of payment and not upto the date of order ie., 07.05.2019. Hence, the impugned charging of interest is not in order. When the statute itself prescribes both the starting point and the ending point, to say that it shall be from the first day of the month in which the duty is provisionally assessed till the date of payment thereof, to read the same as on the date of order is beyond the legislative intent. The matter is remanded to the file of the adjudicating authority to verify from the records and charge the interest only upto the date of payment as mandated in Section 18 (3) and not as upto the date of Order-in-Original - Appeal allowed by way of remand.
Issues:
Appeal against interest charged under Section 18(3) of the Customs Act upheld in Order-in-Appeal C. Cus. II No. 357/2020 dated 12.02.2020. Analysis: The appellant contested the interest charged under Section 18(3) of the Customs Act in the appeal against Order-in-Appeal C. Cus. II No. 357/2020 dated 12.02.2020. The Assistant Commissioner had imposed an interest of &8377; 15,82,866/- as on the date of the order in the Order-in-Original dated 07.05.2019, under Section 18(3) read with Section 28 AA of the Customs Act. The appellant had made a cash/security deposit of &8377; 15,17,765/-, which was utilized towards differential duty along with an interest of &8377; 4,90,768/. The appellant argued that interest should only be calculated from the date of provisional assessment till the date of payment, not till the date of the order. The relevant Section 18(3) of the Customs Act states that interest is payable from the first day of the month in which the duty is provisionally assessed till the date of payment. The tribunal interpreted this provision to mean that interest can only be charged up to the date of payment, not up to the date of the order. Therefore, the tribunal held that the charging of interest until the date of the order was not in line with the legislative intent. Consequently, the tribunal set aside the impugned order and remanded the matter to the adjudicating authority to verify records and charge interest only up to the date of payment as mandated in Section 18(3). The appellant-assessee was to be given an opportunity to present their case before the adjudicating authority to calculate the interest liability up to the date of payment, in compliance with the law. In conclusion, the tribunal's decision clarified the correct interpretation of Section 18(3) of the Customs Act regarding the charging of interest on amounts payable to the Central Government. The judgment emphasized that interest should be calculated from the date of provisional assessment till the date of payment, not till the date of the order, ensuring alignment with the legislative intent and principles of natural justice.
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