No interest on provisional assessments made before13-7-2006 but finalized later
19 August, 2014
Interest is not payable by the importer when provisional assessment was made before 13-7-2006 but the same was finalized much later. Provisions for interest on finalization of assessments were introduced under Section 18(3) of Customs Act, 1962 from 13-7-2006. The dispute which was decided by New Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) by its Order dated 12-8-2014 involved provisional assessments made on 18-2-2005 but finalized on 18-7-2011.
Observing that date of presentation of bill of entry is the date for determination of rate of duty under Section 15 of the Customs Act, the Tribunal noted that there was no dispute in the fact that the bills of entry were filed at a time when sub-section (3) to Section 18 was not in force. It was held that sub-section (3) enacted on 13-7-2006 cannot be presumed to govern bills of entry filed prior to that date particularly when provisional assessment was also made before such date.
Gujarat High Court’s decision in the case of Goyal Traders [2014 (302) ELT 529 (Guj.)] which held that liability to pay interest created by statute shall have prospective application, was also noted by the Tribunal while allowing assessee’s appeal.
Amendments creating fresh liability not retrospective
Relying on Supreme Court’s Judgement in the case of Zile Singh v. State of Haryana [(2004) 8 SCC 1], it was noted that unless there are words in the statute to show intention of the legislature to affect existing rights, it is deemed to be prospective only. It was held that statutory amendments either creating fresh liability hitherto not existing or extinguishing accrued rights would be considered prospective unless the statute either specifically or by necessary implication gives such provision retrospective effect. However, this rule against retrospectivity was found to be inapplicable to such legislations which are explanatory and declaratory in nature.