TaxTMI 
TaxTMI 
2015 (11) TMI 87
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....cords that the appellant had sought provisional assessment of the goods cleared by them during the period April 2011 to March 2012. The provisional assessments were finalised on 27.08.2012. Before the Adjudicating Authority/ competent authority finalised the assessment on 27.08.2012, the appellant on their own calculated the differential duty payable and paid the same on 28.06.2012. Show-cause notice dated 22.08.2013 was issued demanding interest from the appellant. Appellant contested the matter before the Adjudicating Authority as well as before the first appellate authority, that the interest liability does not arise on them as they have discharged the entire duty before the finalisation took place and relied upon the provisions of Rule ....
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.... took up the matter to the Hon'ble High Court and their Lordship vide judgment dated 12.10.2010 upheld the Tribunal order. Consequently, this bench in the case of CEAT Ltd. did not follow the judgment of their Lordship in Ispat Industries Ltd. and took a different view, which was carried to the Hon'ble High Court by the appellant, CEAT Ltd. The Hon'ble High Court by order dated 06.02.2015 set aside the judgment of the Tribunal, holding that interest is not payable on the amount of differential duty, if the same is deposited or paid before finalisation order is issued. The relevant paras of their Lordships judgement are reproduced:- 18. Then, comes sub-rule (3) where a period is prescribed for finalizing the assessment. Then, c....
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....essee has paid the duty before formal finalization order issued by the Deputy/Assistant Commissioner will not make any difference to the legal position. 28. It is in this backdrop that the analysis of the legal provisions of the Rules came to be made from para 8 onwards on which heavy reliance has been placed by Mr. Jetly. Thus, upon finalization of the assessment, the liability to pay interest and in terms of Rule 7(4) was not in dispute but the time from which it became leviable and payable. The argument that determination was not made was negatived and it was held that the liability to pay duty is finally determined with the passing of the final assessment order is the conclusion of the Tribunal. Therefore, interest is liable to be pai....
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....which would enable the larger Bench to hold that the interest which is contemplated by Rule 7(4) is payable in all cases and, therefore, even if the Assessee makes payment of the differential duty prior to finalization of assessment, interest would still be leviable, payable and recoverable in terms of Rule 7(4). For that the Tribunal took assistance of Section 11AA and Section 11BB. 29. We do not find this conclusion of the Tribunal to be correct. As has been rightly urged before us that when a statute levying and imposing tax makes specific provision for recovery of interest on delayed payment only, then, such interest and the liability to pay the same arises. In that regard, the Constitution Bench judgment in the case of J.K. Synthetic....
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....RC, CIT v. Mahaliram Ramjidas, India United Mills Ltd. v. Commissioner of Excess Profits Tax, Bombay and Gursahai Saigal v. CIT, Punjab). But it must also be realised that provision by which the authority is empowered to levy and collect interest, even if construed as forming part of the machinery provisions, is substantive law for the simple reason that in the absence of contract or usage interest can be levied under law and it cannot be recovered by way of damages for wrongful detention of the amount. (See Bengal Nagpur Railway Co. Ltd. v. Ruttanji Ramji and Union of India v. A.L. Rallia Ram). Our attention was, however, drawn by Mr. Sen to two cases. Even in those cases, CIT v. M. Chandra Sekhar and Central Provinces Manganese Ore Co. Lt....
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....that differential duty was paid prior to the date of final assessment. The Division Bench in confirming the view of the Tribunal held as under :- "2. This appeal has been admitted on the following question of law : Whether the CESTAT was right in holding that in terms of the provisions of Rule 7(4), respondent No. 1 could not be held liable to pay the interest on the differential duty as the duty amount has been paid prior to the final assessment, especially when provisions of Rule 7(4) of Central Excise Rules, 2002 read with Section 11AB(2B) of Central Excise Act, 1944, explicitly stipulates that interest is payable on delayed payment of any amount, at the appropriate rates from the first day of the month succeeding the month for which....