No interest on delayed excise duty can be levied without express statutory authority; administrative instructions cannot create liability.

Interest on delayed payment of Central Excise duty could not be levied without express statutory authority, because Article 265 requires taxation and collection to be authorised by law. The Central Excises and Salt Act, 1944 contained no general power to charge interest on arrears, and the limited references in Rules 49(3) and 49A of the Central Excise Rules, 1944 did not create such a general liability. Administrative directions under Rule 233 could not substitute for legislation, and acceptance of instalment facilities did not create liability where none existed in the statute. The writ petitions succeeded and the interest demands were quashed.

---

---

Issues: Whether interest on delayed payment of Central Excise duty could be levied in the absence of an express statutory provision, and whether administrative instructions or payment of duty in instalments could validly authorise such levy.

Analysis: Article 265 of the Constitution of India requires every stage of taxation, including collection, to be authorised by law. The Central Excises and Salt Act, 1944 contained no general provision enabling levy of interest on arrears of Central Excise duty, and the limited references to interest in Rule 49(3) and Rule 49A of the Central Excise Rules, 1944 did not create a general power to charge interest on delayed payment. Administrative directions issued under Rule 233 of the Central Excise Rules, 1944 could not substitute for legislative authority. The fact that assessees had accepted instalment facilities did not create liability where the statute itself did not impose it, because there can be no estoppel against a statute.

Conclusion: Interest could not be demanded on delayed payment of Central Excise duty without express statutory authority, and the levy was invalid.

Final Conclusion: The writ petitions succeeded and the impugned demands for interest were quashed.

Ratio Decidendi: A demand for interest on delayed payment of tax or duty is sustainable only when a statute expressly authorises it; executive instructions or contractual acceptance cannot create such liability in the absence of legislative sanction.

---