2017 (2) TMI 1359 - AT - Central Excise

Interest on Differential Duty Paid Pre-Assessment Not Chargeable Under Central Excise Rules

M/s. Tata Motors Ltd. Versus Commissioner of Central Excise, Pune

The Member(Judicial) held that interest on differential duty paid before finalization of assessment is not chargeable under Rule 7(4) of the Central ... Demand of Interest u/r 7(4) of CER 2002 - whether the interest under Rule 7(4) of Central Excise Rules, 2002 is chargeable on the differential duty paid before finalization of the provisional assessment? - Held that:- The interest on the differential duty paid before finalization of the assessment is not chargeable - reliance placed in the case of Tata Motors Ltd Vs. CCE [2008 (2) TMI 121 - CESTAT, MUMBAI] wherein it was held that any differential duty deposited during the provisional assessement before finalization thereof no interest is chargeable in terms of Rule 7(4) - appeal allowed - decided in favor of appellant. Issues involved:Whether interest under Rule 7(4) of Central Excise Rules, 2002 is chargeable on the differential duty paid before finalization of the provisional assessment.Analysis:The appellant argued that based on previous Tribunal cases and judgments such as Tata Motors Ltd Vs. CCE [2008(226) ELT 563(Tri. Mum)] and [2011(269) ELT 415(Tri. Mum)], no interest is chargeable on differential duty paid during provisional assessment. The appellant also cited Ceat Ltd Vs. CCE & C [2015(317) ELT 192(Bom)] affirmed by the Supreme Court, supporting their stance that interest is not applicable in such cases. The appellant contended that the issue in the present case aligns with the judgments cited, making the impugned order unsustainable.The Revenue, represented by the Asstt. Commissioner(A.R.), argued that Rule 7(4) mandates interest regardless of when the differential duty is paid, stating that interest is chargeable from the 5th of the succeeding month for which duty was payable. The Revenue emphasized that the timing of payment is irrelevant as the duty is determined at the final assessment stage as per Rule 7.Upon reviewing the arguments, the Member(Judicial) acknowledged the force in the Revenue's argument but noted that the issue had been settled by previous Tribunal decisions and the Bombay High Court judgments referenced by the appellant. Following judicial discipline and the precedent set by the cited judgments, the Member(Judicial) concluded that interest on differential duty paid before finalization of assessment is not chargeable under Rule 7(4). Consequently, the impugned order was set aside, and the appeal was allowed.