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TMI Blog2023 (2) TMI 687X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Co P. Ltd (supra) and that of the assessee are identical. In the case of the assessee, the assessee has paid Interest on Customs Duty. In the case of the assessee the Interest on Customs Duty is automatic. Hence, the decision of Hon ble Delhi High Court is applicable in the case of the assessee. As held in the case of CIT Vs. Andhra Sugar Ltd [ 2015 (2) TMI 810 - ANDHRA PRADESH HIGH COURT] that provisions of section 43B are applicable on Interest paid on Purchase duty. Thus we are of the considered opinion that the Interest paid by the assessee on Customs Duty is allowable as deduction u/s 43B - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... round Nos. 3 and 4, the assessee submits that in case, it is held that the provisions of 43B are not applicable to the interest paid on account of delay in payment of custom duty, in that event, the total interest debited in the books of Rs.7,85,20,569/- may kindly be allowed as a deduction while computing the income of the assessee company." 2. Brief facts of the case : In this case during the assessment proceedings the Assessing Officer(AO) observed that assessee had paid Rs.3,37,96,354/- on account payment of interest on custom duty on various dates. The assessee claimed said amount as deduction allowable under section 43B of the Act as being paid on or before due date of filing of return of income for the relevant assessment year. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lfill export obligation and therefore the Director General of Central Excise Investigation (DGCEI) conducted raid to the office of the appellant company and the appellant company admitted that the export obligation could not be fulfilled and there was violation of conditions as per Notification No. 93/2004-CUS dated 10.09.2004. The said letter of the DGCEI dated 18.02.2013 is extracted below, for ready reference: Accordingly, the DGFT directed the appellant company to make payment of duty with interest and thereafter during the F.Y. 2013- 14, the assessee has made payment of Rs.3.37 Crores with interest, for which the claim has been made u/s.43B." 3. Aggrieved by the order of the ld.CIT(A) assessee filed the appeal before this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.09.2004 and the duty liabilities arising thereon. In this connections, the total Duty Liability in respect of the raw material imported under the said Advance Authorisation works out to Rs. 16,72,50,954/-(including duty of Rs.9,15,31,972/- and Interest of Rs.7,57,18,982/- as on 14.02.2013) out of which Rs. 2.78 Crores has been paid by you till date….You are hereby directed to make payment of the remaining amount of Duty along with interest." Unquote. 7. The DGCEI has enclosed calculation of Duty along with the said order vis-à-vis Raw material giving quantity of raw material, Duty liability, Additional Duty and Interest at the rate of 15% Per Annum. 7.1 Thus, in the Order of DGCEI the amount of Duty and Interest has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notification, the DGCEI directed the assessee to pay Duty along with the interest at the rate of 15% PA. Therefore, the Ld.CIT(A)'s findings that the interest paid was penal in nature is erroneous. The Ld.CIT(A) had not referred to the said notification of the Customs Department. We find support from the order of Hon'ble SC in the case of Mahalakshmi Sugar Mills Co Ltd Vs. CIT [1980] 123 ITR 429 (SC) , in which the Hon'ble SC has held as under : Quote, "In our opinion, the interest paid under s. 3(3) of the Cess Act cannot be described as a penalty paid for an infringement of the law." Unquote. 11. Section 43B is reproduced here as under : Certain deductions to be only on actual payment. 43B. Notwithstanding anything contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. However, we find that section 17A(2) of the Himachal Pradesh General Sales Tax Act, 1968, specifically provides that if the amount of tax or penalty due from a dealer is not paid by him within the period specified in the notice of demand or, if no period is specified within thirty days from the service of such notice, the dealer shall, in addition to the amount of tax or penalty, as the case may be, be liable to pay simple interest on such amount at the rate of one percentum per month for the first thirty days and for the period subsequent thereto at the rate of one and a half percentum per month. It is, therefore, clear that when there is a demand of the tax and that is not paid within the period specified in the demand or within thir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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