2018 (1) TMI 349 - AT - Central Excise

Liability of interest - period between provisional assessment and finalization of assessment - Held that - it is evident that it was not possible to read in the Central Excise Rules, 2002 the liability to pay interest for the period between provisional assessment and payment of differential duty till final assessment. Since the payment was made voluntarily before the final assessment which did not result in any dues and payable to the Government, so interest is not payable - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Dispute regarding differential duty payment between provisional and final assessment
- Liability to pay interest for the period between provisional assessment and final assessment

Analysis:
1. Dispute regarding differential duty payment between provisional and final assessment:
The appeal was filed against an order dated 08.12.2016 concerning the financial years 2011-2013. The appellant, engaged in pesticide manufacturing, paid duty provisionally at the applicable rate on the manufacturing date. The Ministry informed about the valuation price difference on 24.3.2014, and the final assessment was completed on 21.9.2015. The department demanded interest from the date of production for goods clearance, leading to the appeal. The tribunal noted that the duty was paid as per provisional assessment during clearance, and the department demanded differential duty for the period between provisional and final assessment.

2. Liability to pay interest for the period between provisional assessment and final assessment:
Referring to the decision of the Hon’ble Bombay High Court and the subsequent affirmation by the Hon’ble Supreme Court, the tribunal concluded that the Central Excise Rules did not establish the liability to pay interest for the period between provisional assessment and payment of differential duty until final assessment. As the payment was made voluntarily before the final assessment, resulting in no dues to the government, the tribunal ruled that interest was not payable. Citing the Supreme Court's precedent, the tribunal found no justification in the impugned order and set it aside, allowing the appeal filed by the appellant.

In conclusion, the tribunal's judgment clarified the absence of a legal basis for demanding interest for the period between provisional and final assessment, ultimately ruling in favor of the appellant based on established legal principles and court precedents.