Appellate Tribunal Upholds Interest Payment Order on Customs Act Final Assessment

The Appellate Tribunal CESTAT AHMEDABAD upheld the order of the Commissioner (Appeals) regarding the payment of interest on final assessment under Section 18 of the Customs Act, 1962. The Tribunal found that the importer is liable to pay interest from the first day of the month in which the duty was provisionally assessed until the date of payment after final assessment, as per the relevant provisions. Despite advice from the Committee on Disputes to not pursue the case, the Tribunal dismissed the appeal, affirming the decision of the Commissioner (Appeals).

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Issues:
Appeal against order passed by Commissioner of Customs, interest payment on final assessment under Section 18 of Customs Act, 1962.

Analysis:
The appeal was filed against the order passed by the Commissioner of Customs, (Appeals) regarding the payment of interest on final assessment under Section 18 of the Customs Act, 1962. The case involved the import of Crude Petroleum Oil where the Appellants filed both In-bond and Ex-bond Bills of Entry which were provisionally assessed and later finally assessed in November-December 2007. A demand notice for interest payment of &8377; 25,78,026 was issued on 13.02.2008, which was confirmed after adjudication. The Appellants appealed to the Commissioner (Appeals) who rejected their appeal, leading to the present appeal before the Appellate Tribunal CESTAT AHMEDABAD.

The Tribunal noted that Section 18 of the Customs Act, 1962 was amended to include sub-rule (3) effective from 13.07.2006. The Appellants filed an Ex-bond Bill of Entry on 14.07.2007, which was provisionally assessed and finally assessed on 10.12.2007. The relevant sub-section (3) of Section 18 states that the importer or exporter is liable to pay interest on any amount payable to the Central Government after final assessment at the rate fixed by the Central Government under Section 28AB from the first day of the month in which the duty was provisionally assessed until the date of payment.

Upon interpreting the provision, the Tribunal concluded that the Assessee is indeed required to pay interest under Section 28AB from the first day of the month in which the duty was provisionally assessed until the date of payment after final assessment. Consequently, the Tribunal found no fault in the order of the Commissioner (Appeals). Additionally, it was noted that the Committee on Disputes had advised M/s IOCL not to pursue the case before the Tribunal in a communication dated 24.03.2011. As a result, the impugned order was upheld, and the appeal was dismissed by the Tribunal.

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