Interest on differential duty for re-warehoused goods remained unsettled and was remanded for fresh adjudication.

Rule 20 permits excisable goods to be removed to a warehouse without payment of duty, subject to conditions including any interest specified by the Board. The assessee relied on the relevant CBEC circular to argue that only duty recovery was provided for when the warehousing certificate was not received, and that no interest liability had been prescribed. The Tribunal found substance in that contention, but since the point had not been raised before the Commissioner and there was no finding from the adjudicating authority, the question of interest on differential duty for re-warehoused goods was remanded for fresh adjudication.

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Issues: Whether interest was chargeable on the differential duty relating to re-warehoused goods under Rule 20 of the Central Excise Rules, 2001 and Section 11AB of the Central Excise Act, 1944.

Analysis: Rule 20 permits removal of excisable goods to a warehouse without payment of duty, subject to conditions, including interest, as may be specified by the Board. The assessee relied on Circular No. 579/16/2001-CX. dated 26-6-2001 to contend that the Board had only provided for recovery of duty where the warehousing certificate was not received, and had not specified any interest liability. The Tribunal found force in this contention but noted that the point had not been raised before the Commissioner and that no finding on the issue was available from the adjudicating authority.

Conclusion: The duty demand was not disputed, but the question of interest liability was remanded to the Commissioner for fresh adjudication after considering the assessee's plea and the overall legal position.

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