Voluntary Payment of Duty before finalisation of Provisional Assessment - CBEC Clarifies
CAN an importer or exporter be allowed to pay customs duties voluntarily in the period intervening provisional assessment and final assessment? This was a question before the Board.
Board clarifies that it can be permitted subject to the condition that
++ Such duty should be paid along with interest, till the date of payment.
++ The term and conditions of the bond and the amount of security or surety furnished at the time of provisional assessment shall remain unchanged; and
++ No refund of duty will be granted till the assessment is finalised.
Board further clarifies that that once duty with interest is paid before finalization, no further interest is payable on the already paid amount.
Does it require a Board Circular for this? Isn't it simple logic? Not with the Revenue.
Some five years ago, this was an issue before the Mumbai Bench of the CESTAT in 2006-TIOL-1972-CESTAT-MUM, wherein it was held that when duty is paid before finalization of provisional assessment, no interest is payable.
Very recently, in , the Tribunal again referred to the 2006 decision and allowed the appeal of the assesse. Interestingly, the Department was pursuing the interest for the last so many years.
Let us hope the latest Circular from the Board will persuade the learned Commissioners in the field to desist from creating such futile litigation.
Incidentally, the Board clarification is on Customs. The field officers can still take a stance that it does not apply to Central Excise!
CBEC Circular No. 40/2011 - Cus., Dated: September 09, 2011