9911796707
TMI Blog2008 (9) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... Ban.) in which it has been held that "interest provision would be applicable after the expiry of the period of one month from the date when the amount is determined". The Division Bench took the view that whether the difference of duly is paid prior to the finalization of provisional assessment under sub-rule (3) or later, interest has to be paid on the differential amount from the first day of the month succeeding the month for which the duty is determined as provided in Rule 7(4), but as this view was in conflict with the decision in M/s. Karnataka Vidyuth Karkhane Ltd. (supra), directed that the records of these appeals be placed before the President for constituting the Larger Bench to resolve the conflict. 2. No 'issue', as such, has been framed in the referral order and, as indicated above, reference was made on account of conflict with the decision in M/s. Karnataka Vidyuth Karkhane Ltd. (supra), at the time of hearing before the Larger Bench, the entire gamut of the dispute - as briefly indicated above - was gone into by both sides. 3. The brief facts of the case of M/s. Bimetal Bearings Limited, appellants in three appeals, are that they have two manufacturing units - on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... variation clause, and therefore, the value of certain inputs which were required to be included for determining the assessable value of the final product was not ascertainable. Like M/s. Bimetal Bearings Limited they also suo motu worked out the duty liability and paid differential duty before the assessment came to be finalized by the assessing authority. A similar demand of interest on the differential amount of duty having been made and confirmed by the Assistant Commissioner and the appeals therefrom having been dismissed by the appellate authority, they have approached this Tribunal in the present appeals challenging the said orders. 5. As the dispute revolves around Rule 7 of Central Excise Rules involving interpretation of certain provisions thereof, the rule may be quoted so far as relevant as under :- "7. Provisional assessment.- (1) Where the assessee is unable to determine the value of excisable goods or determine the rate of duty applicable thereto, he may request the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in writing giving reasons for payment of duty on provisional basis and the Assistant Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; …………… ……………. 6. Shri V. Balasubramaniam appearing for M/s. Bimetal Bearings Limited submitted that assessee is liable to pay interest "consequent to" order for final assessment, that is, after the assessment is finalization and that the assessed duty is paid. Where the differential duty is paid suo motu before finalization of assessment, he is not liable to pay interest on the amount. Counsel placed reliance on the instruction of the Central Board of Excise & Custom contained in para 2.7of part IV (Provision Assessment) of chapter 3 of CBEC's Excise Manual of supplementary Instruction, 2005 which reads as under:- "If the assessee is in a position to ascertain the duty himself, he may pay the duty on his own at the earliest and in that case he will not have to incur interest on account of time taken by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctions (supra), and in such a case there is no question of demanding interest on account, of delay on the part of the Department to finalise the assessment. 9. Interest is a measure of compensation. It is not a penalty and cannot be treated as a burden on the assessee. Where any amount is payable as duty, and only part thereof is paid by way of provisional assessment or even later, suo motu. it results in deprivation of differential duty to the exchequer, that is, financial loss to the exchequer and corresponding financial gain to the assessee. Therefore, whether differential duty is paid prior to or subsequent to final assessment, but beyond the due date, will make no difference. It is difficult to appreciate as to how an assessee can deny the liability to pay interest on the amount of duty. As a matter of fact, as held by the Supreme Court in Commissioner of Trade Tax v. M/s. Kanhai Ram Thekedar, 2005 (185) E.L.T. 3 (S.C.) 2005-TIOL-76-SC-CT, no show cause/demand notice is required to be given before passing order regarding interest. 10. In the ordinary course, the assessee is required to pay the duty by the fifth day of the succeeding month on monthly basis. Provisional asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... next day it is paid and therefore it will be futile exercise to demand interest on the amount of differential duty. Counsel referred to the decision of the Larger Bench in the own case of the appellant reported in 1996 (81) E.L.T. 246 (Tribunal). In course of hearing it was brought to our notice that the issue arising from the plea of Revenue neutrality has been referred to Larger Bench in the case of Bayer ABS Limited v. CCE, Vadodara - 2008 (226) E.L.T. 386 (Tri. - Ahmd.). As such we do not wish to go into this issue - which is also not the subject matter of the present reference - in details. We may nevertheless observe, prima facie, that the plea overlooks the fact that credit can be taken only of the duty paid and not interest. 13. It was also submitted that where the assessee voluntarily pays duty before issuance of show cause notice he should not be saddled with interest. Counsel submitted that Tribunal has consistently taking this view and in this regard he placed reliance on certain decisions of the Tribunal. We are of the view that Rule 7 of the Central Excise Rules is a self-contained law in the matter of a provisional assessment. The decisions cited by the Counsel were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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