Prospective enhanced interest on delayed duty payment applies when payment is made after the notification takes effect.

Enhanced interest under Notification No. 12/2003-C.E. (N.T.) applied to duty paid after its commencement, because the notification was prospective and the liability to interest arose on the date the delayed duty was actually paid. The argument based on cases concerning penalties imposed before a provision came into force was inapplicable, as this matter concerned only an enhanced rate of interest within an existing charging framework. The demand for interest was therefore sustained, and the Revenue's appeal was allowed.

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Issues: Whether the enhanced interest under Notification No. 12/2003-C.E. (N.T.) dated 01.03.2003 applied to duty paid after the notification came into force, even though the due date for payment had expired before its commencement.

Analysis: The notification was prospective and came into force on 01.04.2003. It enhanced the rate of interest for failure to pay duty by the due date. Since the duty in question was actually paid after the effective date of the notification, the liability to interest arose under the notification then in force. The reasoning relied upon by the respondent on cases concerning imposition of penalty prior to introduction of the provision was held inapplicable because the present matter concerned only an enhanced rate of interest under an existing charging framework.

Conclusion: The enhanced interest under Notification No. 12/2003-C.E. (N.T.) applied, and the demand of interest was sustainable in favour of the Revenue.

Final Conclusion: The impugned order was set aside and the Revenue's appeal was allowed, with the duty default attracting interest at the rate prescribed by the notification in force on the date of payment.

Ratio Decidendi: A prospective notification enhancing interest on delayed duty payment applies where the duty is paid after the notification's commencement, even if the original due date had expired earlier.

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