2013 (1) TMI 413 - AT - Central Excise

Interest on seized currency returned back - Currency of Rs.3, 20, 000/- seized from the Appellant in 15.01.1996 & after litigating for a decade finally succeeded to get back the amount on 29.07.2008 - Held that - Agreeing with the finding of the Commissioner(Appeal) that in absence of a specific provision under the Central Excise Act and the Rules made thereunder the interest for the period the currency was retained by the department cannot be granted. It is needless to mention even though the Tribunal has all the trappings of a court but it cannot considered as a court and continue to remain a creature of statute and has to exercise its power within the limits prescribed by the statute - prayer for interest on seized currency even if it is held that the seizure is contrary to law cannot be granted by this Tribunal. Appeal dismissed.

Summary

Issues:
- Appeal against Order-in-Appeal No.11/Kol-I/2010 dated 25.02.2010 passed by the Ld.Commissioner of Central Excise, Kolkata.
- Entitlement to interest on the currency seized and later refunded.
- Interpretation of provisions under the Central Excise Act and Rules regarding interest on seized currency.

Analysis:
1. The appeal was filed by the Appellant against an order passed by the Commissioner of Central Excise, Kolkata, regarding the seizure and subsequent refund of Indian currency amounting to Rs.3,20,000. The Appellant, a Central Excise dealer, sought interest on the refunded amount for the period from 15.01.1996 to 28.07.2008.

2. The Revenue argued that there is no provision under the Central Excise Act or its Rules for granting interest on seized currency, even if the seizure was later found to be incorrect. The Appellant cited precedents and legal principles to support their claim for interest on the seized currency.

3. The Tribunal acknowledged that the currency was seized in 1996 and returned in 2008 after a prolonged legal battle. The Appellant sought interest for the period the currency was retained by the department. The Appellant referenced a judgment by the Rajasthan High Court allowing interest on seized currency, upheld by the Supreme Court.

4. The Tribunal considered the absence of a specific provision under the Central Excise Act and Rules for granting interest on seized currency. Despite precedents cited by the Appellant, including the Rajasthan High Court judgment, the Tribunal emphasized its statutory limitations and inability to grant interest without a clear legal basis.

5. The Tribunal highlighted that, despite having attributes of a court, it operates within statutory boundaries and must adhere to the law. Therefore, in the absence of a specific legal provision, the Tribunal concluded that the request for interest on seized currency, even if the seizure was unlawful, could not be granted. Consequently, the Tribunal dismissed the appeal, emphasizing the necessity of legal provisions for granting interest on seized currency.