2021 (12) TMI 195 - AT - Customs

Levy of interest on Customs duty levied before final assessment - Section 18(3) of the Customs Act - HELD THAT -The date of provisional assessment and date of release of imported goods are reflected and both parties failed to place any provision of law that dictates that interest is payable from the date of import vis- -vis assessment till the date of release of goods. Further, except Section 18(3) of the Customs Act which empowers the Respondent-Department to collect interest after final assessment, no provision of law is placed before this Tribunal to hold a finding that interest can be charged for the period between the date of import and the date of release upon provisional assessment, besides the fact that the order of the Commissioner (Appeals), which is supposed to be defended by the Respondent-Department, is being disputed by the Departmental Representative without a cross appeal as the same contradicts is own finding that the letter of Appraising Officer was not an appealable/adjudication order. The legality of findings of the Commissioner (Appeals) that such provisional assessment was a deemed final assessment in view of dismissal of WRIT by the Hon'ble Delhi High Court is unsupported by any provision of law and apparently based on imagination/surmises. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Demand for payment of interest on Customs duty levied before final assessment and confirmation by the Commissioner (Appeals).

Analysis:

Issue 1: Demand for payment of interest on Customs duty before final assessment
The case involved a dispute regarding the demand for payment of interest on Customs duty levied before the final assessment and its confirmation by the Commissioner (Appeals). The appellant, a member of an Association, imported cosmetics which were provisionally assessed during a pending dispute before the Delhi High Court. The appellant paid the differential duty after a final order was passed by the High Court but was demanded interest by the Appraising Officer. The Commissioner (Appeals) confirmed the interest, which was challenged in the appeal.

Analysis: The appellant argued that no interest is payable without a final assessment under Section 18(3) of the Customs Act. They relied on a judgment of the Bombay High Court in CEAT Ltd. Vs. Commissioner of Central Excise & Customs, Nashik, stating that since duty was paid before finalization, no interest is payable after final assessment. On the other hand, the Respondent-Department argued that the direction in the letter was not an appealable order, and no finding on interest should have been given by the Commissioner (Appeals). The Tribunal noted that no provision of law was presented dictating interest payable from the date of import to the release of goods. The Commissioner's finding that provisional assessment was a deemed final assessment due to the High Court's dismissal was deemed unsupported by law and based on imagination.

Conclusion: The Tribunal allowed the appeal, setting aside the order of the Commissioner of Customs (Appeals) dated 13/12/2018, as it lacked legal support and justification for demanding interest before the final assessment.

This comprehensive analysis of the legal judgment covers the issues involved, the arguments presented by both parties, and the Tribunal's conclusion, providing a detailed understanding of the case and its implications.