Interest on quantified excise duty applies after delayed payment despite a provisional assessment objection

Interest under Section 11AA of the Central Excise Act, 1944 was stated to apply where duty was quantified by an order under Section 11A and remained unpaid for several years after demand. The objection that the matter related to provisional assessment was not accepted, because the demand order retained its character as an order under Section 11A even if linked to finalisation of assessment. On that basis, delayed payment of the quantified duty attracted statutory interest, and the assessee's challenge was rejected.

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Issues: Whether interest under Section 11AA of the Central Excise Act, 1944 was payable on duty quantified under an order passed under Section 11A, notwithstanding the plea that the matter related to provisional assessment.

Analysis: The dispute concerned a duty demand quantified by an order passed after final approval of classification. The objection based on provisional assessment was not raised at the earlier stages. The order confirming duty demand was under Section 11A and, even if treated as linked to finalisation of provisional assessment, it did not lose its character as an order under Section 11A. Since the quantified duty remained unpaid for several years after the demand order, the statutory liability to pay interest under Section 11AA applied for the period of delay.

Conclusion: Interest under Section 11AA was payable on the quantified duty amount, and the assessee's challenge was rejected.

Final Conclusion: The demand of interest on the delayed payment of duty was upheld.

Ratio Decidendi: An order quantifying duty under Section 11A attracts interest under Section 11AA when the quantified amount is paid belatedly, even if the underlying controversy had earlier involved provisional assessment.

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