Interest liability upheld on delay in duty payment during provisional assessment period. Appellant must deposit interest within 4 weeks.

The court upheld the interest liability on delay in payment of duty during the provisional assessment period. The appellant's argument that interest accrues only upon finalization of assessment was rejected. The court emphasized that interest liability arises upon any delay in duty payment, citing established legal precedents. The appellant was directed to deposit the entire interest liability within four weeks, as no grounds for granting a waiver of pre-deposit were found.

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Issues:
Appeal against order-in-appeal upholding interest liability on delay in payment of duty during provisional assessment period.

Analysis:
The appellant contested the interest liability under Rule 7(4) of the Central Excise Rules, 2002, arguing that interest accrues only upon finalization of assessment, not before. Citing the Tribunal's decision in CCE, Nagpur Vs. Ispat Industries Ltd., the appellant claimed no interest liability as the short paid duty was rectified before final assessment. Additionally, the appellant referred to a previous stay order granting waiver from interest pre-deposit for the preceding period.

On the contrary, the revenue, represented by the Additional Commissioner, relied on the Division Bench's decision in CEAT Ltd. Vs. CCE, Nasi, asserting that payment of differential duty before final order does not absolve interest liability. The revenue highlighted that various court decisions, including International Auto Ltd., SKF India Ltd., and J.K. Industries Ltd., establish that interest accrues upon any delay in duty payment, regardless of when the shortfall is rectified.

The presiding judge, after considering both arguments, reiterated the legal position established by the Hon'ble Apex Court and the Karnataka High Court that interest liability arises upon any delay in duty payment, emphasizing its compensatory nature. Referring to the Division Bench's decision in CEAT Ltd. case, which was not brought to the notice of the Single Member Bench in a previous decision, the judge found no grounds for granting a waiver of pre-deposit. No financial hardship was proven by the appellant, leading to a directive for the appellant to deposit the entire interest liability within four weeks.

This detailed analysis of the judgment highlights the legal arguments presented by both parties, the relevant case law cited, and the judge's reasoning in deciding the interest liability issue in the context of the provisional assessment period.

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