Interest on delayed payment of duty in special cases [Section 28AA] :

(a) Interest payable on delayed payment of duty : Notwithstanding anything contained in any judgment, decree, order or direction of any court, Appellate Tribunal or any authority or in any other provision of this Act or the rules made thereunder, the person, who is liable to pay duty in accordance with the provisions of section 28, shall, in addition to such duty, be liable to pay interest at the specified rate, whether such payment is made voluntarily or after determination of the duty under section 28 [Sub-section (1)].

(b) Rate and time period for computation of interest [Sub-section (2)] : Interest shall be paid by the person liable to pay duty in terms of section 28.

Rate of interest: Central Government may, by notification in the Official Gazette, fix the interest ranging between 10% and 36% per annum.

At present, Central Government vide Notification No. 17/2011-Cus. (NT) dated 01.03.2011 has notified the rate of interest of 18% per annum.

Time period: Interest shall be calculated from the first day of the month succeeding the month in which the duty ought to have been paid or from the date of such erroneous refund, as the case may be, up to the date of payment of such duty.

(c) No interest payable subject to certain conditions: No interest shall be payable subject to the following conditions:-

(i) The duty becomes payable consequent to issue of an order, instruction or direction by the Board under section 151A.

(ii) Full amount of duty is paid voluntarily within 45 days from the date of issue of such order, instruction or direction; and

(iii) No right to appeal against such payment at any subsequent stage is reserved.