Per M.V. Ravindran : These two appeals are directed against the Order-in-Appeal No. PI/BBP/128 129/07 dated 20.9.2007 vide which, the Ld. Commissioner (Appeals) has set aside the orders-in-original to the extent that they are not imposed interest on the appellant subsequent to the finalization of provisional assessment. Since the issue involved in both the cases are identical these two appeals are being disposed off by a common order.

2. The relevant facts that arise for consideration are the appellant obtained permission from the department for provisional assessment in respect of clearances affected by them to their sister units. The said provisional assessments were finalized by the adjudicating authority by orders-in-original dt. 28.3.2007 and 30.3.2007. Before the order of finalization, the appellant had already paid differential duty and hence adjudicating authority only adjusted amount of the duty already paid against the duty finalized. The adjudicating authority however, did not order for the recovery of interest as provided under Rule 7(4) of the Central Excise Rules, 2002. Aggrieved by such order, department filed an appeal before the Ld. Commissioner (Appeals). Ld. Commissioner (Appeals) vide the impugned order held as under:-

"I have considered the relevant records. The whole issue is about interpretation of Rule 7(4) of the Central Excise Rules, 2002. The same is reproduced below:-

"(4) the assessee shall be liable to pay interest on any amount payable to Central Government, consequent to order for final assessment under sub-rule(3), at the rate specified by the Central Government by notification issued under Section 11AA or Section 11AB of the Act from the first day of the month succeeding the month for which such amount is determined, till the date of payment thereof." (italics added)

The interest therefore is to be calculated from the first day of the month succeeding the "month for which" such amount is determined till the date of payment thereof. The expression "month for which" is very important. It is better to understand it by an illustration.

Suppose the assessments for clearances affected in September, 2004 were provisional. After the end of the financial year 2004-05 the assessments were finalized say in June, 2005 and short payment of duty of say Rs. 10,000/- was determined. The expression "month for which", will mean the month for which provisional assessment was resorted to i.e. September,2004. Therefore interest will start accruing from 1.10.04 till the date of payment. If the payment was made after finalization of the assessment say on 17.7.05 then the interest will be calculated for the period 1.10.04 to 17.7.05. If the short payment was made before finalization of the assessment say on 15.1.05 then the interest will be calculated for the period 1.10.04 to 15.1.05. In other words the date of order of the finalization of provisional assessment is not relevant. This is so because the expression used in the aforesaid Rule 7(4) is "month for which" such amount is determined and not "month in which" such amount is determined. Had the expression been "month in which" such amount is determined then the date of the order of finalization would have been relevant.

The respondents have relied on three case laws:-

(a) J.K. Industries Ltd. reported in 2006-TIOL-1341-CESTAT-Bang.

(b) Ispat Industries Ltd. reported in 2007 (209) ELT 280 (Tri.-Mumbai)

(c) MSEB Pole Factory reported in 2005 (187) ELT 209 (Tri.-Mumbai).

In my humble opinion in the J.K. Industries case and other cases as well the above distinction (i.e. month for which vis-a-vis month in which) was not brought to the notice of the Hon'ble Tribunal. On the other hand I find that in para 13 of the Tribunal's decision in the case of Hindustan Chemicals Works reported in 1984 (18) ELT 28 (Tribunal) and in para 2 of Tribunal's decision in the case of Canara Lighting Inds. Ltd. reported in 2004 (174) ELT 465 (Tri. Bang) the expression "month for which" was