Tribunal Upholds Decision on Interest Demand Rejection under Customs Act

The Tribunal upheld the Commissioner (Appeals) decision to dismiss the demand for interest on delayed duty payment, citing compliance by the respondents with the Customs Act's payment requirements within the specified period using Demand Drafts. The Tribunal referenced a previous ruling establishing the validity of duty payment by cheque, rejecting the Revenue's argument and emphasizing legal precedents. Consequently, the Tribunal dismissed the Revenue's appeal, affirming the order-in-appeal overturning the demand for interest.

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Issues:
Challenge to order-in-appeal reversing demand of interest on delayed duty payment.

Analysis:
In this appeal, the Revenue challenged the order-in-appeal where the Commissioner (Appeals) overturned the order-in-original demanding interest from the respondents for delayed duty payment. The Revenue contended that the duty payment was delayed beyond the stipulated period, making the respondents liable for interest under Section 47 of the Customs Act. The Revenue argued that the duty should have been paid within two days from the return of the Bill of Entry, excluding holidays. However, the respondents made the payment using Demand Drafts within the prescribed timeframe after assessment, as evidenced by the TR-6 challans. The Tribunal noted that the Customs Act only requires payment within two days of Bill of Entry return, which the respondents complied with by submitting Demand Drafts to the bank within the specified period.

The Tribunal referred to a previous ruling by the Larger Bench in the case of CCE, Jaipur v. M/s. Genus Overseas Electronics Ltd., which established that payment of duty by cheque is valid, with the payment date being the date of presentation if the cheque is not dishonored. The Tribunal rejected the Revenue's argument that this ruling did not apply to duty payment under Section 47(2) of the Customs Act, citing a Board's Circular and emphasizing that the Larger Bench's decision was based on legal precedents from the Apex Court. Consequently, the Tribunal found no fault in the Commissioner (Appeals) decision to dismiss the demand for interest, upholding the impugned order and dismissing the Revenue's appeal.

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