Automatic interest on differential duty after final assessment upheld; separate show cause notice not required.

Interest on differential duty arising from finalisation of provisional assessment under Rule 7 of the Central Excise Rules, 2002 accrues automatically when the final assessment shows an amount payable. The department need not issue a separate show cause notice for recovery of that interest, because the liability follows the rule itself and not a fresh adjudicatory step. On that basis, recovery of interest without a separate notice was upheld and the assessee's challenge failed.

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Issues: Whether interest on differential duty arising out of finalisation of provisional assessment under the Central Excise Rules, 2002 could be recovered without issuance of a separate show cause notice.

Analysis: Rule 7(4) of the Central Excise Rules, 2002 makes the assessee liable to pay interest on any amount payable consequent upon final assessment under Rule 7(3). The liability to interest arises automatically when the differential duty is paid after finalisation of assessment. The rule does not require the department to issue a separate show cause notice for recovery of such interest, and the adjudication order had already proceeded on that basis.

Conclusion: The recovery of interest without a separate show cause notice was held to be valid, and the challenge by the assessee failed.

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