Interest and penalty on delayed payment of Exice duty and return

[CMA VENKATESHAM MUTA]

Sir,Please clarify me the following doubt.ED payable is rs 10000 on 6th aug-15But payment and return filed on 25-09-2015,Int. Paid is rs. 150,Penalty paid rs. 100,Penalty for delay in return paid 1400 (per day rs. 100)As on today what amount should I pay towards interest and penalty.Kindly clarify my doubt

[CMA VENKATESHAM MUTA]

Sir,In the above case duty paid rs 11650, along with the return on 25-09-2015

[Rajagopalan Ranganathan]

Sir,

The amount of duty to be paid is ₹ 10.000/- There is a delay of 50 days in depositing the duty. The rate of interest is 18%. Therefore the amount of interest payable will be ₹ 247. Penalty for delayed payment of duty is 1% if the defaulted amount for the period of delay of two months. It works out to Ts. 17. Therefore the total amount to be paid is ₹ 10,264/-. The relevant rule is rule 8 of Central Excise Rules, 2002.

In respect of return you have to file it on or before 10.8.2015. But you have filed it on 25.9.2015. Therefore there is a delay of 45 days. This attract a penalty of ₹ 4,500/- (45 days x ₹ 100/- per day) vide sub-rule 6 of rule 12 of Central Excise Rules, 2002.

[CMA VENKATESHAM MUTA]

Thankq very much air,In the above case duty paid full and interest and penalty paid partly on 25-09-2015.What amount should I pay as on today,Whether interest and penalty to be calculated on duty amount from due date or 25-09-2015.Pls clarify me sir

[Rajagopalan Ranganathan]

Sir,

Since you have paid duty in full on 25.92015 and you have filed the return on 25.9.2015, you have to pay interest and penalty up to 25.9.2015 only. I have calculated the amounts on the above basis only. Even if you pay interest and penalty partly you pay the remaining amount of penalty and interest immediately. No interest on interest and interest on penalty is payable.

[CMA VENKATESHAM MUTA]

Thanks a lot Sir

AI Summary

Interest on delayed excise duty must be calculated up to payment date; penalties and no interest on interest apply. Interest on unpaid excise duty is chargeable from the due date until the date the duty is paid; a separate penalty applies for delayed duty payment. Late filing of the return attracts a per day penalty. When duty and return are both paid/filed on the same later date, interest and duty penalty are calculated only up to that date. Part payments leave the balance payable immediately. No interest is chargeable on interest or on penalty.