Retrospective excise duty amendment does not by itself create retrospective interest liability for the prior period.

A retrospective amendment to the Chapter 15 note in the Central Excise Tariff Act created duty liability for refined edible vegetable oil from an earlier date, but interest was held not payable for the period before the amendment. The legal principle applied was that interest arises only when duty becomes due, and a retrospective creation of duty liability does not automatically create a retrospective obligation to pay interest. The tribunal followed its earlier view that, absent a pre-existing duty liability, no interest could be levied for the prior period.

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Issues: Whether interest was payable on excise duty demanded in respect of refined edible vegetable oil when the levy was made applicable retrospectively by insertion of a chapter note.

Analysis: The amended chapter note to Chapter 15 of the Central Excise Tariff Act, 1985 was inserted on 28.02.2005 and was given retrospective effect from 01.03.2003. The liability to pay interest arises only when the duty amount becomes due. Since the duty liability itself arose only upon the amendment, there was no pre-existing obligation to pay duty or interest for the earlier period. The tribunal also followed its earlier view that a retrospective creation of duty liability does not, by itself, create a retrospective liability to pay interest.

Conclusion: Interest was not payable for the period prior to the amendment, and the Revenue's appeal failed.

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