Interest on delayed excise duty cannot be deferred merely because annual capacity was determined later under the compounded levy scheme.

Interest on delayed excise duty under the compounded levy scheme was held not to be postponable merely because the annual capacity of production was determined later. The duty liability was linked to annual capacity, and where the assessee's capacity was initially fixed and later found, after litigation and remand, to remain the same for the earlier period, the pendency of capacity-determination proceedings did not defer interest from the date duty became payable. The claim that interest could arise only from final capacity determination was rejected, and the issue was decided against the assessee. No substantial question of law arose.

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Issues: Whether interest on delayed payment of excise duty under the compounded levy scheme could be denied on the ground that the annual capacity of production was finally determined only later.

Analysis: The duty liability under the compounded levy scheme was linked to the annual capacity of production. The assessee's capacity had been initially fixed and, after litigation and remand, was ultimately found to remain the same for the earlier period, with reduction only for a subsequent period because of change in machinery. On these facts, the pendency of proceedings regarding capacity determination did not justify postponing the liability to pay interest from the date on which duty was otherwise payable.

Conclusion: The claim that interest could be charged only from the date of final capacity determination was rejected and the issue was decided against the assessee.

Final Conclusion: No substantial question of law arose, and the appeal failed.

Ratio Decidendi: Mere litigation over capacity determination does not defer interest liability where the duty was due from the original payable date and the capacity ultimately remains substantially as earlier fixed.

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