Interest on excise duty not leviable where payment was timely made through Cenvat credit and later corrected by PLA debit.

Interest under Rule 8(3) of the Central Excise Rules, 2002 was not leviable where NCCD had already been discharged within time through the Cenvat credit account and the later PLA debit was only a corrective step taken at the department's insistence. Rule 8(3) applies only when duty remains unpaid by the due date, and the circular treating NCCD as a duty of excise supported the assessee's bona fide view; on the same footing, penalty under Rule 25 was not sustainable.

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Issues: Whether interest under Rule 8(3) of the Central Excise Rules, 2002 and penalty under Rule 25 of the Central Excise Rules, 2002 were leviable when National Calamity Contingent Duty was discharged within time through the Cenvat credit account and later debited from PLA on the department's insistence.

Analysis: The duty was not unpaid by the due dates; it had already been discharged through the Cenvat credit account. Rule 8(3) applies where the assessee fails to pay the duty by the due date, attracting interest on the outstanding amount till actual payment. The clarification in Circular No. 641/32/2002-CX dated 26-6-2002 also supported the assessee's bona fide view that NCCD was a duty of excise. Since the later PLA debit was only a corrective step taken at the department's insistence, it could not be treated as delayed payment for purposes of interest. For the same reason, penalty was not justified.

Conclusion: Interest was not leviable and penalty was not sustainable.

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