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2024 (3) TMI 508 - AT - CustomsLiability to pay interest upon finalization of provisional assessment prior to insertion of sub-section (3) in Section 18 of the Customs Act, 1962 - case of appellant is that the said provisional assessment had been undertaken prior to the incorporation of the said provisions [Section 18(3)] in law carried out by Taxation Laws Amendment Act 2006 with effect from 13.07.2006. Whether the differential duty is payable upon finalization on the entire duty leviable or only on the differential component of duty paid by the importer upon finalization of the goods? Whether Section 18(3) would come into play for provisional assessments having taken place prior to the date of its insertion in the statute, i.e. to say if applicable, would it have a retrospective applicability? HELD THAT:- A perusal of sub-section (3) of Section 18 shows that an assessee becomes liable to pay interest on the differential duty calculated at the time of final assessment at the rate fixed under Section 28AB of the Customs Act, 1962. It is a common principle of law that a legislation is always prospective in nature unless when by express words or by necessary implication the provisions are declared or construed to have retrospective effect - Also it is well established that a substantive provision of law cannot be considered to be retrospective unless specified to the contrary by the Legislature. The court’s have repeatedly held the amendment to Section 18 of the Act, as a substantive piece of legislation and it cannot be considered to be of a clarificatory nature. The same cannot be therefore given a retrospective effect. The provisions of Section 18(3) of the Act, would have no application to the present case and the Assessment Order demanding payment of interest, in respect of provisional assessment made prior to 13.07.2006 is not in accordance with law. The said issue being no more res integra, it need to be also pointed out that with the reference to similar provisions on the excise side, incorporated vide Rule 7(4) of the Central Excise Rules, 1944, the Board Vide Order- Instruction- Central Excise issued vide their Reference No.- F.No. 354/66/2001–TRU dated 21.06.2001, had clarified that provisions relating to charging of interest will apply only to cases in which provisional assessment is resorted to after the date of promulgation and had specifically indicated the date 01.07.2001. It clarified that such provisions would not be applicable with respect to provisional assessments carried out in the past period, even if the assessments were finalized on or after the said date of incorporation of similar provisions on the excise side for charging of interest. The question of demand of interest either on the entire duty amount or on the differential duty is no more relevant - the order of the lower authority suffers from inherent defect of misinterpretation of law and therefore is liable to be quashed - Appeal allowed.
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