Interest on the amounts collected in excess of the duty [Section 11DD]:

In the following circumstances, interest shall be payable on the amount determined under sub-section (3) of section 11D:

(a) where the amount of duty collected from the buyer exceeds the amount of duty assessed or determined under this Act or

(b) where the amount of duty collected from any person exceeds the amount of duty assessed or determined under this Act or

(c) where a person has collected any amount as representing duty of excise on any excisable goods which are wholly exempt or are chargeable to nil rate of duty

Such interest shall be payable by the person who is liable to pay the amount determined under sub-section (3) of section 11D in addition to the said amount.

Rate and time period for computation of interest: The rate of interest shall be notified by the Central Government which would be in the range of 10% to 36% per annum. The interest shall be payable from the first day of the month succeeding the month in which the amount ought to have been paid till the date of payment of such amount [Sub-section (1)]. Currently the rate is 15% p.a. as notified vide Notification no. 68/2003 C.E. dated 12.09.2003.

Exemption from payment of interest: However, in cases where the amount becomes payable consequent to issue of an order, instruction or direction by the Board under section 37B, and such amount payable is voluntarily paid in full, without reserving any right to appeal against such payment at any subsequent stage, within 45 days from the date of issue of such order, instruction or direction, as the case may be, no interest shall be payable and in other cases the interest shall be payable on the whole amount, including the amount already paid.

Where the amount determined under section 11D(3) is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or the court, as the case may be, the interest payable thereon shall be on such reduced or increased amount respectively.