Interest on instalment-based excise duty payments cannot arise without statutory authority or an express condition

Interest on differential excise duty paid in instalments was held unsustainable where no statutory provision authorised such levy and no instalment order imposed interest as a condition. A Board circular alone could not create a liability to pay interest. The Court held that allowing instalment payment was mere indulgence and did not, by itself, generate an enforceable interest obligation. The demand for interest was therefore quashed.

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Issues: Whether interest could be demanded on the differential excise duty paid in instalments in the absence of statutory sanction or an order stipulating interest.

Analysis: The demand was founded only on a Board circular suggesting levy of interest when payment is permitted in instalments. No statutory provision authorising such interest was shown, and no order permitting instalments had imposed interest as a condition. The Court held that mere indulgence in allowing instalment payment did not, by itself, create a liability to pay interest.

Conclusion: The demand for interest on the differential excise duty was unsustainable and was quashed.

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