Excise interest not payable when factory closure, abatement, and prompt duty payment on resumption show no delayed withholding.

Interest under the excise packing-machines framework was held not payable where the factory remained closed for a continuous period, abatement was granted on the manufacturer's declaration, and duty was paid immediately when production resumed. The relevant payment mechanism had to be read with the abatement provision, so advance payment for a full month did not apply in the same way as in a month of continuous operation. As the duty was not shown to have remained unpaid after it became due, the compensatory interest provision could not be invoked, and the interest demand was set aside.

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Issues: Whether interest was payable on excise duty when the factory remained closed for a continuous period, abatement under the packing machines rules was granted, and duty was paid immediately on resumption of production.

Analysis: The duty payment mechanism under the packing machines rules has to be read with the abatement provision. Where production is suspended for more than fifteen days and the department itself grants abatement on the basis of the declaration filed by the manufacturer, the liability to pay duty in advance for the whole month does not arise in the same manner as in a month of continuous operation. The second proviso to Rule 9, which contemplates interest for delayed payment beyond the due date, applies only where duty was due and remained unpaid. On the facts found, the factory was closed for the relevant period, the duty was paid on the first working opportunity after resumption, and there was no withholding of duty after it became due.

Conclusion: Interest was not payable and the demand confirmed by the lower authorities was unsustainable.

Final Conclusion: The appeal succeeded and the interest levy was set aside.

Ratio Decidendi: Interest under the excise framework is compensatory and can be levied only when duty has actually become due and is withheld beyond the stipulated time; where the factory is closed, abatement is granted, and duty is paid promptly on resumption, no delay attracting interest is established.

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