9911796707
TMI Blog2011 (4) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration of six contracts under Project Import Regulations with Visakapatnam Customs House during 1991. Out of six contracts, five had been cleared through Madras Customs House. It is seen from the facts herein that the assessee imported certain capital goods for the manufacture of Ammonium Nitrate and Nitric Acid. These goods were assessed to duty as Project imports. Following the announcement of new Export Import Policy for clearance of capital goods under the EPCG Scheme, which provided for concessional rate of Customs duty subject to fulfilment of certain export obligation, the assessee got the Import Licence amended accordingly through DGFT. In respect of performance of the obligation, a show cause notice dated 26.7.1999 was issued by the Revenue, alleging violation of Notification No.160/92 - Cus dated 20.4.1992, that the respondent had not fulfilled the obligation. The adjudication ultimately culminated into an order dated 28.8.2002 passed by the Commissioner of Customs (Sea), Chennai. The adjudication order, apart from confirming the duty demanded, also resulted in confiscation of seized goods with option for redemption and imposition of penalty to a sum of Rs.2,01,89,241 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal, but however, ordered adjustment of the refund claimed as against the demand. The Commissioner further pointed out that the Deputy Commissioner did not place any evidence on record to show that the demand made by any other proper officer under Section 142 of the Customs Act requiring him to deduct the amount as payable by the assessee. When the demand had been struck down by the CEGAT vide order No.911/03 and having regard to the fact that the Commissioner (Export) had recorded that no amount is due from the assessee as per the CEGAT's order, the adjustment was illegal. As far as interest issue is concerned, the Deputy Commissioner had not passed any order. Therefore, the said aspect was not considered in the appeal. The assessee preferred a further appeal before the CESTAT, as against the interest claimed, which was not granted by the Commissioner. By order dated 14th February, 2005, CESTAT allowed the appeal holding that the Revenue was liable to pay interest from the date of payment of interest till the date of refund of the same. In so holding, the Tribunal followed the decision reported in 254 ITR 605 COMMISSIONER OF INCOME TAX v. NARENDRA DOSHI to order refund of interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty. The word 'duty' appearing in Section 27 of the Customs Act has to be read as inclusive of interest on the belated payment. Hence, the assessee is entitled to interest on interest. Referring to the definition of duty in Section 2(15) of the Customs Act, he pointed out that having regard to the interest payable on the payment of duty, the interest thus paid, ought to have been included into the concept of duty for the purpose of considering the claim under Section 27A of the Customs Act. In any event, he pointed out that the provisions of Section 27(2) of the Customs Act contemplates refund of duty with interest. As such, going by the Heading to Section 27A of the Customs Act, 'interest on belated refund', the scope of the term 'duty' for the purposes of grant of interest should be read as 'inclusive of interest payment on the belated remittance of the duty'. Thus, when the Section contemplates interest on delayed refund, the interest payable on the refund amount, as such has to be inclusive of interest on the interest paid on the belated payment . 8. Learned Senior Counsel appearing for the assessee placed reliance on the decision reported in [2006] 280 ITR 643 SANDVIK ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months from the date of receipt of application, interest shall be payable by the Central Government on the refund claim. It is a matter of interest to note that while Section 27(2) of the Customs Act speaks about the refund of duty and interest, Section 27A of the Customs Act stops with making reference to the refund of duty alone and makes no reference at all to the interest payable on the interest on the belated payment of duty, which is ordered to be refunded. When the language used in the Section is clear and there is no ambiguity, it is a well settled principle of law that Section does not call for any interpretation. Section 27(1) and (2) of the Customs Act speaks about the refund of claim on duty on interest; Section 27A of the Customs Act, inserted in the year 1995, reads as follows: "27A. Interest on delayed refunds.-- If any duty ordered to be refunded under sub-section (2) of section 27 to an applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below five per cent and not exceeding thirty per cent per annum as is for the time being fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled as against the judgment of the Bombay High Court reported in 267 ITR 78, the Supreme Court considered the grant of interest for the delay in the payment of amount due to the assessee, which were held contrary to law. The Supreme Court held that Section 214(1) recognises in principle, the Government has the liability to pay interest on the amount of tax paid by an assessee in excess of the amount of assessed tax. Once the interest becomes due, it takes the same colour, as the excess amount of tax refundable to the assessee, on regular assessment. Consequently, as advance tax is treated as paid in pursuance of an order of assessment, interest is payable under Section 244 of the Income Tax Act. The expression 'amount' in Section 244(1A) of the Income Tax Act, refers not only to tax, but also to interest, the term being a neutral expression. Thus, reversing the decision of the Bombay High Court, the Apex Court held that the assessee was entitled to interest on the amount of interest paid under Section 214 and/or Section 244 of the Income Tax Act. 17. A reading of the above-said decision of the Supreme Court shows that while charging interest from the assessee, the Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st paid by the assessee, in paragraphs 75 and 76, the Supreme Court considered the general principles and ultimately held that the assessee was entitled to interest. 20. It must be noted herein that the decision of the Apex Court is based on the interpretation of the word 'any amount' as appearing in Sections 240 and 244(1A) of the Income Tax Act and in the absence of any specific provision on grant of interest on the belated refund of the interest component, it applied the general principles. Quite apart, even otherwise, the facts therein indicated that the claim of the assessee was by way of Writ Petition, challenging the order of the Commissioner, rejecting the claim of the assessee for interest. Hence, the decision relied on by the learned Senior Counsel appearing for the assessee has to be understood in the context of the facts therein and the provisions of law and the same cannot be of any assistance to the assessee herein. 21. As regards the applicability of general principles herein to the case, it must be pointed out that the proceedings before this Court is by way of appeal, as against the order of the CESTAT, made in exercise of Appellate Jurisdiction und ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
