ORDER
T.K. Jayaraman, Member (T)
1. In this case provisional assessment in respect of service tax payable by the respondents was ordered with effect from 24-7-96. The finalisation of the provisional assessment for the period from 1994-95 to 2002-2003 was ordered on 19-3-2004. In that order demand of interest was also ordered even for the period prior to 1-7-2001. The argument of the respondent is that provisions of Rule 9B of the erstwhile Central Excise Rules, 1944 with regard to provisional assessment were made applicable to Service tax also. However, the Central Excise Rules, 2001 only introduced for the first time, “Interest clause” when the provisional assessment is finalised. In other words, there is no statutory provision to demand interest on finalisation of provisional assessment for the period prior to 1-7-2001. The Commissioner (Appeals) set aside the orders of the lower authority demanding interest for the period prior to 1-7-2001. Revenue has come in appeal against the order of the Commissioner (Appeals) on the following grounds:
1. Commissioner (Appeals) while concluding that charging of interest in cases of provisional assessment can be resorted to only on or after 1-7-2001, in view of the fact that amendments came into effect only from that date when Central Excise provisions made applicable to service tax, cannot be heard to say that provisional assessments that are continued after amendment would not attract interest provisions.This ill create an anomalous situation and result in unequal treatment, which is not envisaged by the amendment.
2. The Commissioner (Appeals) has sought to give a meaning to the word ‘ordered’ appearing in the Supplemental Instructions issued by the Board, which would defeat the very purpose of interest clause introduced on and from 1-7-2001.
3. The Manual of Supplementary Instructions, even if suggests the meaning given by Commissioner (Appeals) cannot override the statutory provisions, which envisage imposition of interest on and from 1-7-2001.
2. Ld. SDR Shri B.L. Meena appeared on behalf of the Revenue and Shri N. Venkataraman, ld. Counsel for the respondents.
3. Heard the parties. I have gone through the case records. Interest clause was for the first time introduced only with effect from 1-7-2001. Therefore the action of the lower authority in demanding interest for the provisional assessment ordered on 24-7-96 for the period prior to 1-7-2001 is patently illegal. Order of the Commissioner (Appeals) is legal and proper. The grounds of appeal of the revenue have no substance. Hence Revenue’s appeal is rejected.