Interest on delayed cess payments requires express statutory authority; incorporation of collection machinery alone is not enough.

Interest on delayed payment of cess cannot be recovered unless the statute creating the levy contains an express substantive provision authorising interest. A borrowing or incorporation clause that applies the Central Excise Act machinery for levy and collection does not, by itself, extend to interest liability. On that basis, the absence of an express interest provision in the Sugar Export Promotion Act meant the demand lacked jurisdiction and was unsustainable.

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Issues: Whether interest could be recovered on delayed payment of cess under Section 7(4) of the Sugar Export Promotion Act, 1958 in the absence of an express provision in that Act.

Analysis: Section 7(4) made the provisions of the Central Excise Act, 1944 and the rules thereunder applicable for levy and collection of duty and other sums referred to in the section, but the provision did not contain any express or substantive stipulation for levy of interest. The settled principle applied was that interest on delayed payment of tax or duty can be levied only when the statute that creates the liability also makes a substantive provision for such levy. A borrowing or incorporation clause may extend procedural machinery, but it does not by itself authorise recovery of interest unless the parent enactment expressly provides for it. In the absence of such authority, demand of interest lacks jurisdiction.

Conclusion: Interest could not be recovered under Section 7(4) of the Sugar Export Promotion Act, 1958, and the demand was unsustainable.

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