Tribunal rules in favor of appellants in interest demand appeal under Customs Act.

The Tribunal ruled in favor of the appellants in an appeal against the demand of interest on the differential duty under Section 18(3) of the Customs Act, 1962. The Tribunal held that as the imports in question were made between 1999-2003, prior to the enactment of Section 18(3) in 2006, the provision for interest on finalization of provisionally assessed bill of entry did not apply. Consequently, the demand for interest was waived, and the appeals were allowed, with stay applications disposed of accordingly.

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Issues:
Appeal against demand of interest confirmed on differential duty under Section 18(3) of the Customs Act, 1962.

Analysis:
The appellants appealed against the demand of interest confirmed on the differential duty paid by them. The case involved the import of certain items during 1999-2003, with provisional assessment followed by finalization in 2010. The impugned order demanded interest on the differential duty from the date of provisional assessment till the duty payment date under Section 18(3) of the Customs Act, 1962.

The appellant's advocate argued that Section 18(3) came into effect from 13-7-2006, and prior to that date, there was no provision for interest on finalization of provisionally assessed bill of entry. Citing a precedent, the advocate contended that since the imports in this case predated 2006, the appellant should not be liable to pay interest on the finalization of assessment.

On the other hand, the respondent's representative supported the impugned order, emphasizing that Section 18(3) mandates the payment of duty and interest on the differential duty from the provisional assessment date until the duty payment date.

After hearing both arguments, the Tribunal noted that before 13-7-2006, there was no provision for demanding interest on differential duty upon finalization of provisionally assessed bill of entry. As the imports in this case occurred between 1999-2003, the Tribunal concluded that the provision of Section 18(3) for interest demand did not apply. Consequently, the demand for interest was waived, and the appeals were allowed. Additionally, stay applications were disposed of accordingly.

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