2013 (11) TMI 999 - AT - Customs

Import of copper concentrate - Demand of interest - Held that - Prior to 13.7.2006 there were no provision for demand of interest on differential duty on finalization of provisionally assessed Bill of Entry. The provision came in force with effect from 13-7-2006 and the same is applicant on the imports made after 13-7-2006. Admittedly, in this case, imports have been made during the period 1999-2003; therefore, the provision of Section 18(3) of the Customs Act, 1962 for demand of interest is not applicable in this case - Decided in favour of assessee.

Summary

Issues:
1. Levy of interest under Section 18(3) of the Customs Act, 1962 on provisional assessment of duty.

Analysis:
The judgment revolves around the issue of the levy of interest under Section 18(3) of the Customs Act, 1962 on the provisional assessment of duty. The appellant had imported copper concentrate under seven Bills of Entry between April 2005 to February 2006, which were assessed provisionally. The adjudicating authority finalized the assessment and directed the appellant to pay interest. The appellant challenged this levy of interest through an appeal before the Commissioner (Appeals), which was rejected. The demand of interest was quantified under Section 18(3) of the Customs Act, 1962.

The appellant contended that Section 18(3) was inserted with effect from 13.7.2006 and should be applied prospectively. They relied on previous Tribunal decisions to support their argument that interest cannot be levied under Section 18(3) for assessments prior to 13.7.2006. On the other hand, the Revenue argued that interest is compensatory in nature and cited Supreme Court decisions to support their stance that interest is payable even without a specific provision.

The Tribunal analyzed the legal provisions and previous decisions. It noted that prior to the introduction of sub-section (3) of Section 18, there was no provision for the payment of interest on provisional assessment of duty. The Tribunal highlighted that Section 18(3) mandates the payment of interest from the first day of the month in which duty is provisionally assessed till the date of payment. Since the duty in this case was provisionally assessed before 13.7.2006, the Tribunal held that interest cannot be levied under Section 18(3) retrospectively.

Referring to specific Tribunal cases, the judgment emphasized that the demand of interest under Section 18(3) is not sustainable for assessments made before 13.7.2006. The Tribunal distinguished the Revenue's reliance on Supreme Court decisions, noting that those cases were not directly related to the demand of interest under Section 18(3) of the Customs Act. Ultimately, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief as necessary.