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2014 (6) TMI 519 - HC - Central ExciseDemand of interest on delayed payment of additional duty on TEA - additional duty of excise payable under Section 157(1) of the Finance Act 2003 - applicability of provision of Central Excise Act, 1994 toward demand of interest - Held that:- there is no substantive provision contained in the Finance Act 2003 to charge/levy interest on delayed payment of additional excise duty payable under Section 157(1) - liability to pay additional duty of excise on tea is created for the first time by Section 157(1) of the Finance Act 2003. However, the Finance Act of 2003 does not contain any substantive provision to charge/levy interest from the assessee in case if payment of additional duty of excise is not made or made late. So far as Section 157(3) is concerned , it does not mention the word “interest” but only mentions the words “imposition of penalty, refund and exemption”. In other words, by virtue of Section 157(3), only provisions relating to “imposition of penalty, refund and exemption” from Central Excise Act are made applicable to Finance Act, 2003. This, therefore, clearly suggests that so far as levy of additional duty of excise on tea is concerned, no provision is made applicable to the levy relating to payment of interest for its delayed / short / non-payment. To put it differently, firstly, there is no provision made to levy/ charge interest in the Finance Act, 2003: secondly, substantive provision relating to levy/ charging of interest from Central Excise Act is not made applicable to Finance Act, 2003 and thirdly, by virtue of Section 157(3), only provisions relating to penalty, refund and exemption contained in Central Excise Act are made applicable to Finance Act, 2003. Revenue may have power to charge interest from the assessee for non-payment/ short payment/ delayed payment of “excise duty” on the excisable goods but there is a distinction between “ additional duty of excise” and “ excise duty”. The former is paid under the Finance Act 2003 whereas the later is paid under the Central Excise Act. Since the Finance Act, 2003, does not contain any substantive provision to charge interest, a fortiorari - no demand for interest could be raised for non-payment/ short payment/ delayed payment of additional excise duty under the Finance Act, 2003. Such is not the case of non-payment /short payment /delayed payment of “excise duty” because it is paid under the Central Excise Act which contains a specific substantive provision to charge the interest. If the intention of legislature was to levy interest also on non-payment/short payment of “additional duty of excise” then, it would have made separate specific substantive provision in the Finance Act, 2003 itself. However, it was not done. Impugned demand raised by respondent is without jurisdiction as it was issued by the department without there being any substantive provision to levy/charge interest in the Finance Act, 2003. It is therefore not legally sustainable and has to be quashed. - Following decisions of J.K.Synthetics Ltd Vs CTO [1994 (5) TMI 233 - SUPREME COURT] and India Carbon Ltd vs State of Assam [1997 (7) TMI 566 - SUPREME COURT OF INDIA] - Decided in favour of assessee.
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