2014 (2) TMI 777 - AT - Central Excise

Interest on delayed payment - Rule 20 of CER, 2002 - Warehousing provisions - Whether the appellants are required to pay interest on this delayed payment of duty or not - Held that - there being no Circular issued by the Board, specifying any interest rate, as envisaged in Rule 20(2), the interest cannot be confirmed against them in terms of Section 11AB. The said Rule is a complete code in itself and provides facility for warehousing, subject to the condition including interest, specified by the Board. Inasmuch as the Board has only specified the recovery of duty of excise, no interest can be demanded from them - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
- Dispute over payment of interest on delayed duty payment due to transit losses exceeding condonable limit of 1%.

Analysis:
The judgment revolves around the issue of whether the appellant, engaged in manufacturing petroleum products and transferring stock without duty payment under bond, is liable to pay interest on delayed duty payment due to transit losses exceeding the condonable limit of 1%. The Tribunal referred to a similar case involving Indian Oil Corporation Ltd. where the matter was remanded back to the adjudicating authority for further consideration based on contentions raised by the appellant's counsel. The appellant argued that since no Circular specifying interest rates was issued by the Board as required under Rule 20(2), interest cannot be confirmed against them under Section 11AB. The Tribunal, following the precedent decision, set aside the impugned order and remanded the matter back to the adjudicating authority for a fresh consideration in accordance with the law after providing a reasonable opportunity of hearing to the appellants.

In conclusion, the judgment highlights the significance of adherence to statutory provisions and precedents in determining the liability of interest on delayed duty payment. The Tribunal's decision to remand the matter emphasizes the need for a thorough examination of legal aspects and procedural requirements before confirming any financial obligations on the appellant.