2011 (2) TMI 853 - AT - Customs

Demand and Interest - Provisional assessment - whether interest is leviable when the provisional assessment was resorted to prior to 13.7.2006 i.e. the date of introduction of sub-Section 18 (3) in the Customs Act 1962 - As regards the decision of the Tribunal in the case of Chemsilk Commerce (P) Ltd vs. Commissioner of Customs (Port) 2008 -TMI - 88885 - CESTAT KOLKATA it has been stated that the relevant order must have been passed prior to 13.07.2006 since the appeal number list the year 2005 - Therefore there was no question of confirmation of demand under Section 18(3) of Customs Act 1962 - Decided in favour of assessee.

Summary

Issues involved:
Provisional assessment, duty dispute on classification of fuel and oil, demand for interest under Section 18(3) of Customs Act, 1962.

Analysis:
The judgment revolves around a case where the bill of entry was provisionally assessed due to the absence of original documents and a duty dispute on fuel and oil classification. The final assessment order resulted in a demand for differential duty and interest under Section 18(3) of the Customs Act, 1962. The appellant challenged only the interest demand, leading to an appeal. The Revenue contended that interest was leviable as per Section 28AB of the Customs Act, 1962, introduced to protect actions already taken. They cited a Supreme Court decision emphasizing the compensatory nature of interest for withheld tax payments. The Tribunal's decision in Sterlite Industries' case was referenced, stating interest cannot be levied on differential duty paid after provisional assessments made before 13-7-2006. The Tribunal's reasoning was based on the law in force at the time of the provisional event. The judgment rejected the Revenue's appeal, citing the precedent set by the Sterlite Industries case, where interest was deemed inapplicable to pre-13-7-2006 provisional assessments. The presence of Section 28AB at the time was crucial, and the Tribunal's specific considerations of the law overruled the general observations in the Pratibha Processors case. The absence of a stay on the department's appeal was deemed irrelevant, leading to the rejection of the Revenue's appeal.