Full Judgment
1. By consent, the writ petition itself is taken up today for final disposal.
2. The writ petition is for the issue of a writ of certiorarified mandamus to quash the order of the third respondent, dated 31-1-1992 and that of the second respondent, dated 14-2-1992 and to forbear the respondents from demanding interest from the petitioner on the payment of the differential excise duty in instalments. The petitioner Company is manufacturing cement. They had filed a writ petition, W. P. No. 3684 of 1986 seeking the benefit of a concessional tariff. Pending disposal of the writ petition, the petitioner was permitted to furnish Bank guarantee for a total sum of Rs. 60,28,000/-. The writ petition was ultimately dismissed and the petitioner was called upon to pay the differential duty to the tune of Rs. 1,08,70,038.71. The third respondent had also encashed the Bank guarantee for the sum of Rs. 60,28,000/-. The petitioner was, therefore, called upon to pay the balance of Rs. 48,42,038.71. The petitioner made a representation to the Central Board of Excise and Customs seeking permission to pay the said balance in instalments. Though no specific order was passed, it transpires that the petitioner was paying the said balance amount of Rs. 48.42,038.71 in instalments at the rate of Rupees Five lakhs per month. The respondents have now chosen, by the impugned orders, to claim interest for the differential amount at the rate of 17.50 per cent. The argument is that there is no statutory sanction for claiming interest on the said payment of the differential amount.
3. A counter-affidavit has been filed stating that the petitioner having asked for payment in instalments, and having been able to successfully postpone the payment of duty, legitimately due to the Government, is bound to pay interest. Apart from this, the respondents are not able to lay their hands on any statutory provision for insisting on payment of the interest. No doubt, there is a Circular, dated 20-4-1985 issued by the Board, which seems to suggest that whenever payment is permitted in instalments, interest should be charged, which was originally at the rate of 12 per cent and subsequently enhanced at 17.50 per cent. Apart from this, there is no statutory sanction for claiming interest. I asked the counsel whether there was any order permitting the petitioner to pay the differential amount in instalments, and whether such an order prescribed the payment of interest. It is now made clear that there was no such order and consequently it cannot be argued that at the time of granting permission to pay the amount in instalments it was made clear that the instalments will carry interest. Learned counsel for the respondents only says that in the normal course when a party is permitted to pay the amount in instalments or after a delay of certain time, it goes without saying that he should pay interest for the indulgence shown to him. I am not inclined to accept these arguments for the purpose of fastening a liability to pay interest, on the petitioner. It is now made clear that the entire differential duty has been paid in instalments of Rupees Five lakhs per month. I am, therefore, not inclined to sustain the impugned orders claiming interest on the payment of differential amount. Consequently, this writ petition is allowed. No costs.