2018 (9) TMI 749 - HC - Central Excise

Interest - relevant date for calculation of Interest - whether the date will be calculated from the date of the enactment of the Finance Bill, 2011 i.e. 08.04.2011 till the date of actual payment of the differential duty i.e. 31.05.2011 or not from the due date of payment of the differential duty i.e. 29.04.2010 till the date of actual payment? Held that - The Apex Court in Star India (P)Ltd. 2005 (3) TMI 10 - SUPREME COURT very clearly makes reference to the validation clause in Finance Act, 2002 - there is no difference with the Finance Act, 2011 which arises for consideration in this appeal. Appeal dismissed.

Summary

Issues:
- Calculation of interest on retrospective amendment in Central Excise Act, 1944
- Interpretation of the Finance Act, 2011
- Consideration of previous judgments and validation clauses

Analysis:
1. Calculation of Interest on Retrospective Amendment:
The main issue in this case revolves around the calculation of interest on duty payable due to a retrospective amendment in the Central Excise Act, 1944. The Tribunal's decision was challenged, questioning whether interest should be calculated from the date of enactment of the Finance Bill, 2011 or from the due date of payment of the differential duty. The High Court admitted the appeal to reconsider this question of law, emphasizing the need for detailed examination due to the absence of a validation clause in the Finance Act, 2011.

2. Interpretation of the Finance Act, 2011:
The High Court revisited the case after initially leaning towards dismissal based on a precedent involving a validating act. The court highlighted the importance of determining whether the retrospective amendment in the Finance Act, 2011 was clarificatory or not. The judges noted the relevance of the Apex Court's decision in a similar case involving the Finance Act, 2002, where the liability to pay tax was extended through retrospective amendment, leading to a nuanced interpretation of interest calculation.

3. Consideration of Previous Judgments and Validation Clauses:
The High Court extensively analyzed previous judgments, particularly referencing the decision in Star India (P) Ltd., to draw parallels and distinctions in the context of validating acts. The court observed that the impugned order of the Tribunal followed a decision of its Coordinate Bench, which is subject to a pending appeal before the Madhya Pradesh High Court. The judges admitted the appeal for a detailed consideration at the final hearing, emphasizing the need for a comprehensive review of the issues raised in light of the legal precedents and interpretations of the Finance Acts.

In conclusion, the High Court's judgment delves into the complexities of calculating interest on duty payable under retrospective amendments, requiring a meticulous examination of the Finance Act, 2011, and the implications of clarificatory provisions. The court's decision to admit the appeal underscores the significance of clarifying legal interpretations in light of previous judgments and validation clauses to ensure a just and informed resolution of the case.