The Appellate Tribunal held that the demand of interest under...

The Appellate Tribunal held that the demand of interest under Sections 18(3) and 28AB of the Customs Act, 1962, for the period prior to 13.07.2006 is unsustainable as the show-cause notice did not propose such interest, violating principles of natural justice. Post 13.07.2006, no interest liability arises where the differential duty was paid before finalization of provisional assessment, and the final assessment showed nil duty payable. Consequently, no interest is payable on the differential duty paid prior to assessment finalization. Since the interest demand fails, the associated penalty cannot be imposed. The impugned order confirming interest and penalty was set aside, and the appeal was allowed.

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