Interest on pre-2001 provisional assessments was not attracted merely because finalisation occurred after the new Excise Rules.

Interest on differential duty arising from provisional assessments made for clearances before 1 July 2001 was not attracted merely because finalisation occurred after the Central Excise Rules, 2002 came into force. The Board clarification treated the interest provision in Rule 7 as applicable only to provisional assessments resorted to on or after 1 July 2001. On that basis, and following the earlier view in the appellant's own case and the Bombay HC ruling, pre-2001 provisional assessments did not carry interest liability under the later rule. The interest demand on the impugned assessments could therefore not be sustained.

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Issues: Whether interest was payable on finalisation of provisional assessments made for clearances prior to 1 July 2001, when the assessments were finalised after the Central Excise Rules, 2002 came into force.

Analysis: The dispute concerned interest on differential duty arising from provisional assessments made under Rule 9B of the Central Excise Rules, 1944. The Board clarification stated that the interest provision in Rule 7 applies only where provisional assessment is resorted to on or after 1 July 2001 and not to earlier provisional assessments, even if finalised later. The earlier decision in the appellant's own case and the Bombay High Court ruling were relied on for the principle that interest liability under the new rule is not attracted to pre-2001 provisional assessments merely because finalisation occurred later.

Conclusion: Interest was not payable for the period before 1 July 2001, and the demand of interest on the impugned provisional assessments could not be sustained.

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