2018 (6) TMI 1485 - HC - Central Excise

Demand of Interest and Penalty - Section 15(4) of the Oil Industry (Development) Act, 1974 - failure to pay cess on due dates during the period from April, 2002 to June, 2003 - Held that - Section 15(4) does not provide for payment of interest. Therefore, in the absence of any substantive provision in the Oil Industry (Development) Act, 1974, which obliges the respondent to pay interest on delayed payment of cess, the Tribunal has rightly dismissed the appellant s appeal - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against order confirming interest and penalty under Oil Industry (Development) Act, 1974.
- Interpretation of Section 15(4) of the Oil Industry (Development) Act, 1974 regarding payment of interest on delayed payment of cess.

Analysis:
The judgment pertains to an appeal against an order confirming interest and penalty under the Oil Industry (Development) Act, 1974. The respondent, a producer of Crude Oil and Natural Gas, failed to pay cess on due dates from April 2002 to June 2003. Consequently, show cause notices were issued, and the Assistant Commissioner confirmed the interest and imposed a penalty. The respondent appealed, and the Commissioner allowed it. Subsequently, the appellant's appeal was dismissed by the Tribunal, leading to the current appeal before the High Court.

The main argument presented on behalf of the appellant was that the respondent was liable to pay interest and penalty under Section 15(4) of the Oil Industry (Development) Act, 1974. However, a crucial point of contention arose regarding the interpretation of Section 15(4) concerning the obligation to pay interest on delayed cess payments. The Court noted that Section 15(4) did not explicitly mandate the payment of interest. Citing a Supreme Court decision in a similar context, the Court emphasized that interest on tax due could only be charged if the taxing statute contained a substantive provision for such payment, which was absent in this case.

Based on the above analysis, the Court concluded that in the absence of a specific provision in the Oil Industry (Development) Act, 1974 requiring the payment of interest on delayed cess, the Tribunal's decision to dismiss the appeal was justified. The Court's interpretation was further reinforced by the Supreme Court's ruling in a related matter. Consequently, the appeal was deemed to lack merit and was summarily dismissed by the High Court.