Order Date – 06 December 2023

Parties: Cadbury India Ltd Vs Commissioner of Central Excise Pune – I

Fcats –

• The Appellant, Cadbury India Ltd, had cleared intermediate goods during 1992-96, provisionally under rule 9B of Central Excise Rules, 1944.
• Due to dispute in valuation, the assessments were finalized on 30th December 2011 and appellant required to pay differential duty for the period and, except for the portion on which disputed interest continues to subsist, the consequential dues had been discharged by them.

Issue –

• Whether the interest leviable on finalization of provisional assessment prior to 2001?

Order –

• The Tribunal observed that though the assessments were rendered as provisional under rule 9B of Central Excise Rules, 1944, the finalization occurred after Central Excise Rules, 2002 came to into effect. The issue pertaining to leviability of interest on finalization of provisional assessment, in all cases pertaining to clearances prior to 2001, has been set at rest by the Central Board of Indirect Taxes & Customs (CBIC) in circular no. 354/66/2001-TRU dated 21st June 2021.
• Furthermore, in another dispute of theirs decided by the Tribunal, in Cadbury India Ltd v. Commissioner of Central Excise, Pune – I [2009 (246) ELT 342 (Tri.-Mumbai)], it was held that “Similarly there is nothing in the Larger Bench CESTAT decision in the case of Bimetal (supra) relating to provisions of Rule 9(b) as the same also deals with the provisions of Rule 7(4) of the Central Excise Rules, 2002. Interest cannot, therefore, be charged prior to July 2001.”
• In view of the clarification issued by the Central Board of Indirect Taxes & Customs (CBIC) as well as judicial determination in their own case, the impugned order does not sustain and is accordingly set aside.