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2010 (12) TMI 996 - HC - Central ExciseInterest under the Sugar Export Promotion Act, 1958 - Held that - As it is apparent that interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf - section 7 of the Sugar Export Promotion Act, 1958 does not make any provision for levy and charge of interest on the duty of excise payable under sub-section (1) thereof - Tribunal was justified in holding that there being no provision for interest in the Act, there was no justification or warrant to confirm the interest - Decided in favor of the assessee
Issues Involved:
1. Justification of the Tribunal's decision regarding interest recovery under the Sugar Export Promotion Act, 1958. 2. Applicability of penalty decisions to interest recovery. 3. Jurisdiction under Section 7(4) of the Sugar Export Promotion Act, 1958 for interest recovery. 4. Applicability of penal interest provisions of the Central Excise Act, 1944 to the Sugar Export Promotion Act, 1958. 5. Interpretation of "including" and "any other sum" in Section 7(4) of the Sugar Export Promotion Act, 1958. Detailed Analysis: 1. Justification of the Tribunal's Decision Regarding Interest Recovery: The Tribunal held that interest cannot be claimed and recovered from the assessee under the Sugar Export Promotion Act, 1958. The respondent-assessee, engaged in sugar manufacture, did not furnish proof of export for 25,000 quintals of sugar, resulting in the differential cess payment. The adjudicating authority demanded interest on delayed cess payment, which was later set aside by the Tribunal. The High Court confirmed that Section 7 of the Sugar Export Promotion Act does not provide for interest on delayed payment, supporting the Tribunal's decision. 2. Applicability of Penalty Decisions to Interest Recovery: The Tribunal equated the claim for interest with the imposition of a penalty, referencing the Supreme Court's decision in Collector of Central Excise, Ahmedabad v. Orient Fabrics (P) Ltd. The High Court noted that the Tribunal correctly applied this precedent, which emphasizes the need for clear legal authority for imposing penalties or interest. The Tribunal's reliance on the principle that interest recovery requires explicit statutory provision was upheld. 3. Jurisdiction Under Section 7(4) of the Sugar Export Promotion Act, 1958 for Interest Recovery: Section 7(4) of the Act was scrutinized to determine if it conferred authority to claim and recover interest. The provision applies the Central Excise Act's procedures to the levy and collection of excise duty under the Sugar Export Promotion Act. However, the High Court found that this does not extend to interest recovery, as the Act lacks a substantive provision for such interest. The Tribunal's interpretation that Section 7(4) does not authorize interest recovery was affirmed. 4. Applicability of Penal Interest Provisions of the Central Excise Act, 1944 to the Sugar Export Promotion Act, 1958: The appellant argued that Section 11AB of the Central Excise Act, which mandates interest on delayed payments, should apply to the Sugar Export Promotion Act. The High Court rejected this, emphasizing that the Sugar Export Promotion Act does not incorporate interest provisions from the Central Excise Act. The Tribunal's decision that penal interest provisions do not apply was upheld. 5. Interpretation of "Including" and "Any Other Sum" in Section 7(4) of the Sugar Export Promotion Act, 1958: The appellant contended that the terms "including" and "any other sum" in Section 7(4) imply authority to recover interest. The High Court disagreed, stating that these terms do not explicitly authorize interest recovery. The Tribunal's interpretation that the section does not cover interest was validated. Conclusion: The High Court dismissed the appeal, affirming the Tribunal's decision that the Sugar Export Promotion Act, 1958 does not provide for interest recovery on delayed cess payments. The Tribunal's reliance on legal precedents and statutory interpretation was upheld, confirming that interest can only be levied if explicitly provided for in the statute.
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