Manufacturer wins appeal on interest & penalty imposition for timely duty payment

The appeal was allowed in favor of the appellant, a manufacturer of P.C.C. Poles, regarding the liability of interest and penalty under Rule 7(4) of the Central Excise Rules, 2002. Despite the payment of the differential duty within the specified timeframe, interest and a personal penalty were imposed. The court found the interest and penalty unwarranted as the appellant had paid the duty promptly. The appellant was granted relief as the payment was made within the stipulated time frame, leading to the appeal's success.

---

---

Issues Involved: The liability of interest and penalty u/s Rule 7(4) of Central Excise Rules, 2002 on a manufacturer of P.C.C. Poles following final assessment.

In the present case, the appellant, engaged in the manufacture of P.C.C. Poles, had provisional assessment during the relevant period. The final assessment was completed by the proper officer through an impugned order dated 31-1-2003, resulting in the payment of a differential duty of Rs. 2,41,830 in two instalments. Despite the timely payment within one month from the order, interest was confirmed against the appellant, along with a personal penalty of Rs. 5,000.

The relevant provision of Rule 7(4) of Central Excise Rules, 2002 states that interest is payable on any amount due to the Central Government after the final assessment order, from the first day of the month following the determination of the amount until the payment date. As the appellant paid the entire differential duty by 24-2-2003, within the stipulated time frame, the interest and penalty imposed were deemed unwarranted. Consequently, the appeal was allowed, granting relief to the appellant.

It is noted that the impugned order by the Commissioner (Appeals) relates to two separate appeals. The present order specifically addresses the appeal concerning the facts outlined earlier, distinct from another appeal filed by the appellant on the same issue, which is pending consideration with a delay condonation application.

---