Retrospective interest on provisional assessment differential duty was not permissible when the charging provision had not yet commenced.

Interest under Section 18(3) of the Customs Act could not be levied on differential duty paid after finalisation of provisional assessments where those assessments were made before 13-7-2006. Section 18(3) is a substantive charging provision for interest on differential duty arising from final assessment, and it cannot operate retrospectively absent express legislative intent. The reference to the rate under Section 28AB does not make Section 28AB the source of the levy. The Board's clarification on the pari materia excise rule was treated as supporting this position, confirming that no interest is payable where provisional assessment predated the commencement of the provision.

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Issues: Whether interest could be levied under Section 18(3) of the Customs Act on differential duty paid after finalisation of provisional assessments made before the provision came into force.

Analysis: Section 18(3) is the charging provision for interest on differential duty arising on finalisation of provisional assessment, and it came into force only on 13-7-2006. The provisional assessments in question were made before that date. A substantive charging provision cannot be applied retrospectively in the absence of express legislative intent. The reference in Section 18(3) to the rate prescribed under Section 28AB does not make Section 28AB the substantive source of the levy. The Board's view under Rule 7(4) of the Central Excise (No. 2) Rules, 2001 was treated as applicable in principle because the provisions are pari materia, and the Board had clarified that interest could not be levied where provisional assessment predated the commencement of the charging provision.

Conclusion: No interest could be levied under Section 18(3) of the Customs Act on differential duty paid after finalisation of provisional assessments made before 13-7-2006.

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