Retrospective interest liability cannot be imposed on pre-1-4-2000 clearances absent clear legislative intent.

Interest under Rule 173G(1)(d) of the Central Excise Rules, 1944 could not be levied on differential duty relating to clearances made before 1-4-2000, because the interest clause and the corresponding due-date scheme came into force only from that date. The provision was therefore treated as prospective, and past clearances could not be subjected to a new burden in the absence of clear legislative intent for retrospective operation. The analysis also relied on the Board's clarification under Section 11AB of the Central Excise Act, 1944. Accordingly, interest for the period before 1-4-2000 was not payable and the demand was unsustainable.

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Issues: Whether interest under Rule 173G(1)(d) of the Central Excise Rules, 1944 could be levied on differential duty relating to clearances made before 1-4-2000, when the interest clause itself came into force only from that date.

Analysis: The interest provision was introduced with effect from 1-4-2000 and operated in conjunction with the scheme of due dates under Rule 173G(1)(a). Since both the liability to pay duty by the prescribed due dates and the consequential interest clause were brought into force only from 1-4-2000, they could not be applied to clearances made earlier. The reasoning was supported by the Board's clarification under Section 11AB of the Central Excise Act, 1944 and by the settled principle that a statute is not to be given retrospective effect so as to prejudice vested rights or impose a new burden in respect of past transactions unless such intent is and unmistakable.

Conclusion: Interest was not payable for the period prior to 1-4-2000 and the demand could not be sustained.

Ratio Decidendi: A statutory interest liability introduced from a specified date cannot be applied retrospectively to past clearances in the absence of clear legislative intent.

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