Interest on differential excise duty could not be levied for the pre-amendment period; Section 11AA applied prospectively.

Interest was not leviable on differential excise duty paid after determination of the dispute for a period preceding insertion of Section 11AA of the Central Excise Act, 1944. The earlier interest mechanism under Rule 173G(1)(d) applied only to the fortnightly duty-payment regime approved under Rule 47, and could not be extended to levy interest on duty paid on supplementary invoices or on reclassification after adjudication. Because Section 11AA was introduced later and operated prospectively, there was no prevailing provision authorising interest for the pre-amendment period. The assessee therefore succeeded.

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Issues: Whether interest was leviable on differential duty paid after determination of the duty dispute for the period prior to insertion of Section 11AA of the Central Excise Act, 1944, and whether Rule 173G(1)(d) of the Central Excise Rules, 1944 could be invoked for such levy.

Analysis: The demand arose from differential duty paid on supplementary invoices and on reclassification of goods, and the Revenue sought interest for the period between clearance and actual payment. The earlier framework in Rule 173G dealt with fortnightly payment of duty approved under Rule 47, and the interest clause in Rule 173G(1)(d) was held applicable to that regime. The Court noted that Section 11AA, which created a specific liability to pay interest on duty paid voluntarily or after determination, was inserted later and was expressly prospective. Since the period in dispute preceded the amendment, there was no provision then in force to levy interest on duty paid after determination of the dispute.

Conclusion: Interest was not leviable for the pre-amendment period, and the assessee succeeded.

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