Interest demand under excise rules stands, but authorities must disclose the breakup and basis of quantification.

Interest demanded under Rule 96ZO(3) of the Central Excise Rules, 1944 was treated as recoverable even though the rule was later struck down, because no saving clause protected past cases. The absence of prior notice did not invalidate the demand, since it flowed automatically from the earlier order-in-original. However, the assessee was entitled to a clear breakup showing how the interest was quantified, particularly where the departmental figure differed materially from the assessee's computation and the original records were not produced. The demand was therefore not cancelled outright, but a fresh demand with computation details was required before recovery in accordance with law.

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Issues: Whether the demand of interest raised pursuant to the order-in-original could be sustained without furnishing the basis for quantification and whether the petitioner was entitled to a fresh demand with breakup details.

Analysis: Interest was demanded under Rule 96ZO(3) of the Central Excise Rules, 1944, and the Court noted that the liability to pay interest could not be avoided merely because the rule had later been struck down, as there was no saving clause for past cases. The objection based on absence of prior notice was rejected because the demand flowed from the earlier order and was automatic. At the same time, the Court found that the petitioner was entitled to know how the amount of interest had been computed, especially when there was a substantial difference between the departmental figure and the petitioner's calculation. Since the original records were not produced, the quantification could not be independently verified.

Conclusion: The impugned demand was not quashed in full, but the first respondent was directed to issue a fresh demand with breakup details showing how the interest was computed and then recover the amount in accordance with law.

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