Retrospective interest liability under Customs Act provisional assessment amendments is impermissible absent clear legislative intent.

Section 18(3) of the Customs Act, 1962 was treated as creating a fresh statutory liability to pay interest on differential duty arising from final assessment of provisional clearances. The amendment was held to be substantive, not merely procedural, and there was no express or implied legislative intent to give it retrospective effect. Applying the principle that a new fiscal burden operates prospectively unless clearly made retrospective, interest could not be fastened on provisional assessments made before 13.07.2006, even though finalisation occurred later.

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Issues: Whether interest could be levied under Section 18(3) of the Customs Act, 1962 on differential duty arising from provisional assessments made before 13.07.2006 and finalised after that date, and whether the provision could be applied retrospectively.

Analysis: Section 18(3) introduced, for the first time, a statutory liability to pay interest on the amount becoming payable on final assessment, with the rate linked to Section 28-AB of the Customs Act, 1962. The amendment was held to be substantive in nature, creating a fresh liability, and there was no express or necessary implication making it retrospective. The governing principle applied was that a statute creating a new obligation or liability is ordinarily prospective, especially in fiscal legislation. Since the provisional assessments in the case were made before 13.07.2006, the amended provision could not be applied to fasten interest liability for that earlier period.

Conclusion: Interest under Section 18(3) of the Customs Act, 1962 could not be levied on differential duty arising from provisional assessments made prior to 13.07.2006, and the issue was decided against the Revenue.

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