Board of Excise & Customs
Interest on Delayed Payment of Duty
Clarification - reg.
been brought to the notice of the Board that various practices are being
followed in Custom Houses regarding calculation of interest for delayed payment
of duty. It has been stated that while some Custom Houses/Central Excise
Commissionerates are including the date of payment in the period for calculating
the interest, others are not doing so. It has been pointed out that the banks
charge interest only up to the date of payment excluding the date of payment.
Therefore, clarification has been sought as to whether the date of payment is to
be included in the period for calculating interest under section 28AA/28AB or
any other section of the Customs Act, 1962 or as the case may be, under section
11AA/11AB of the Central Excise Act, 1944 and rules made thereunder.
matter has been examined in consultation with the Ministry of Law (Department of
Legal Affairs). The views of the Ministry of Law are as follows:
far as the day on which duty is being paid for calculating of interest, the word
till has been used in the Section. The meaning of the word till as
given in Law Lexicon Dictionary, Second Edition is to the time of. In
Strouds Judicial Dictionary of Words and Phrases, Sixth Edition, p.2664, the
meaning of the word till is until. The word until has been
analysed in the same dictionary on p.2788 as it is generally inclusive.
Courts have evolved a general principle of a strict construction of taxing
statues. It has to be strictly interpreted, if the language of the statute is
plain and simple. When the intention of the Parliament is clearly visible from
the words used by Parliament, it is not open to speculate on what would be most
fair and equitable mode of interpretation of a tax law. The meaning of the word
given in dictionary is to the time of which makes it clear that whole of
the period to the time of payment is to be counted for the purpose of
calculating of interest".
view of the above, it is clarified that the date on which the payment of duty is
made is to be included in the period for calculating the interest on delayed
payment under Section 28AA/28AB or any other section of the Customs Act, 1962 or
as the case may be, under section 11AA/11AB or any other section of the Central
Excise Act, 1944 and rules made thereunder.
Difficulties, if any, in implementation of above instructions, may be brought to
the notice of the Board. Kindly acknowledge receipt of the Circular.