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TMI Blog2024 (1) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... while the impugned goods during the material time, were statutorily leviable to 12% ad valorem rate of Additional Duty of Customs. 1.1. The issue concerns imports made under cover of thirty five self assessed Bills of Entry by the appellant. Duty so short paid, for an amount of Rs. 3,86,63,232/-, was sought to be recovered vide Show Cause Notice No. DRI-F 718(II)02/Seize/PRU13-14 dated 23/05/13, in terms of Section 28(1) of the Customs Act, 1962 (The Act.) Interest leviable on the short paid, duty amount was also demanded from the appellants under Section 28AA of the Customs Act. The Departments' case being, that the self-assessed duty, payable in terms of Section 17(1) of the Act was not in accordance with law and as it was not in conformity with applicable rate of Additional Duty leviable under Section 3(1) of the Customs Tariff Act, 1975 (The Tariff Act.), therefore, interest as applicable under Section 28AA of the Customs Act, alongwith the short paid duty was payable. 2. The Department points out that the effective rate of Central Excise Duty on goods falling under CTH 8607 was revised to 12% ad valorem vide Notification 18/2012 CE dated 17.03.2012. The Central Excise Duty l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were directed to deposit Rs. 3,86,63,232/-, within eight weeks, by way of pre-deposit under Section 129(E) of the Customs Act, whereupon balance dues adjudged would stand waived and recovery thereof stayed during the pendency of the appeal. 4.1. While the appellant at the time of filing of the appeal, contested both the demand for duty as well as interest leviable thereto; at the time of hearing on 26.09.2023, they pointed out that they were not contesting the payment of differential duty any longer, and would render pleadings only for the leviability of interest (confirmed on the short levied Additional Duty of Customs/CVD), under Section 28AA of the Customs Act. It is so also specifically stated, at more than one place in the written submissions filed by the appellant at the time of hearing of the appeal. Relevant part of their submissions reads as under: "Written Notes on Arguments xxxxxxx 6. Issue Involved: The issue involved in the instant appeal is whether the learned Commissioner was right in confirming the demand of interest on the short levied CVD at the applicable rate (s) in terms of Section 28AA of the Customs Act. 7.8. Issue Involved: The appellant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1975, while Additional Duty/Special Additional Duty are leviable under section 3/section 3A of the Customs Tariff Act respectively, and therefore this duty is not relatable to the First or the Second Schedule of the CTA, as the rate of duty is prescribed in the said section itself. Sri Pulak Shah, the learned CA, drew similar analogy with reference to section 90 of the Finance Act 2000 levying surcharge of Customs. The appellant therefore, submitted that charging section for CVD/SAD/surcharge was not section 12 of the Customs Act, but the appropriate sections of Tariff Act. Reliance in support of the aforesaid proposition in law was also drawn by the appellant to the Hon'ble Supreme Court's decision in the case of Hyderabad Industries Limited Vs. Union of India (1999 (5) TMI 29 SC.), wherein the Hon'ble Apex Court had held that additional duty (CVD) which is levied under Section 3(1) of the Tariff Act is independent of the Customs duty which is levied under Section 12 of the Customs Act. 6.1. With regard to the claim of interest, the appellant contended that for understanding the leviability of interest payable on the duty amount short paid, in respect of duty other than basic Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an addition to, and in the same manner as, a duty of customs, but does not include - (a) .............................................. (b) ................................................... (c) ...................................................... (d) ..................................................... Provided......................................... (a)................ (b)................ Explanation. - Where on any imported article........................... (3) If the Central Government is satisfied that it is necessary in the public interest to levy on any imported article [whether on such article duty is leviable under sub-section (1) or not] such additional duty as would counter-balance the excise duty leviable on any raw materials, components and ingredients of the same nature as, or similar to those, used in the production or manufacture of such article, it may, by notification in the Official Gazette, direct that such imported article shall, in addition, be liable to an additional duty representing such portion of the excise duty leviable on such raw materials, components and ingredients as, in either case, may be determined by rules made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty shall be levied and collected at the rate of eight per cent of the value of the article imported into India. Explanation.-................................. (2) For the purpose of calculating under this section the special additional duty on any imported article shall, notwithstanding anything contained in Section 14 of the Customs Act, 1962 or Section 3 of this Act, be the aggregate of- (i) the value of the imported article determined under subsection (1) of Section 14 of the Customs Act, 1962 (52 of 1962) or the tariff value of such article fixed under subsection (2) of that section, as the case may be; (ii) any duty of customs chargeable on that article under Section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs but does not include- (a) the safeguard duty referred to in Sections 8B and 8C; (b) the countervailing duty referred to in Section 9; (c) the anti-dumping duty referred to in Section 9A; (d) the special additional duty referred to in sub-section (1); and (iii) the additional duty of customs chargeable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrow the provisions of the Customs Act, relating to interest. In support of their proposition, the learned Chartered Accountant, placed reliance on the decision of the Hon'ble Supreme Court in the case of Khemka and Company (Agencies.) Pvt. Ltd. Vs. State of Maharashtra (1975 (2) SCC 22), wherein the appellant contends that the Hon'ble Apex Court in the context of Central Sales Tax Act 1956, had held that penalty or interest is a statutory liability and is in addition to tax. There must therefore be a charging section, to create a liability. The liability has to be created first, thereafter the act needs to provide for assessment, followed by the enforcement provisions of the taxing statute. The fact that there is a machinery provision for assessment, collection and enforcement of tax and penalty in the State Act does not automatically mean that the provision for penalty in the State Act can be considered as one for the Central Act as well. In support the appellants relied on the enunciation in para 28 of the said order, which reads as: "28. .................... A penalty is a statutory liability. The Central Act contains specific provisions for penalty. Those are the only provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ires a clear authority of law for its imposition in terms of Article 265 of the Constitution. 10. Learned CA for the appellant, inviting reference to the Hon'ble Gujarat High Court's decision in Collector of Central Excise Surat-I Vs. Ukai Pradesh Khand Udyog Mandali Ltd (2011 (271) ELT 32 GUJ), stated that the Hon'ble Court while dealing with the provisions of the Central Excise Act read with Sugar Export Promotion Act, 1958, had held that interest can be levied and charged on delayed payment of tax only if the statute that levies the tax makes a substantive provision in this behalf. Submitting that sub-Section 4 of Section 7 of Sugar Export Promotion Act, 1958, was akin to sub-Section (8) of Section 3 and sub-Section (4) of Section 3A of the Customs Tariff Act, 1975 they invited reference to para 17 of the order of the Hon'ble Gujarat High Court, which is extracted herein below: "17. From the principles enunciated in the above referred decisions, 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 substantive provision in this behalf. In the facts of the present case, as noted herein above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. Therefore, no interest and Bombay High Court penalty can be levied on the portion of payment pertaining to surcharge, CVD and SAD. We must also note that sub-section (8) of Section 9A of the Customs Tariff Act, 1975, prior to the 2004 amendment, did not include interest and penalties. By Section 76 of Finance (No.2) Act, 2004, the words in sub- Section (8) of Section 9 of the Customs Tariff Act, 1975 "relating to non-levy, short levy, refunds and appeals" were replaced with "relating to, the date for determination of rate of duty, non-levy, short levy, refunds, interest, appeals, offences and penalties". No such amendment to include interest and penalty was inserted in sub-Section (6) of Section 3 or sub-Section (4) of Section 3A of the Customs Tariff Act, 1975. Therefore, the intention of the legislature was very clear that it wanted to include interest and penalties only with regard to anti-dumping duty on dumped articles and not for CVD, i.e., special additional duty. No such insertion or amendment was made in Section 90 of Finance Act, 2000 relating to surcharge. Therefore, interest and penalty cannot be levied on the portion of demand pertaining to surcharge under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t must provide for enforcement of the taxing provisions. The mere fact that there is machinery for assessment, collection and enforcement of tax and penalty in the State Act does not mean that the provision for penalty in the State Act is treated as penalty under the Central Act. The meaning of penalty under the Central Act cannot be enlarged by the provisions of machinery of the State Act incorporated for working out the Central Act. 27. This Court in State of Tamil Nadu v. K.A. Ramudu Chettiar & Co. said that the power to enhance assessment which was contained in the Madras Act of 1959 though such power was not available under the 1939 Act would be available in respect of assessment under the Central Act. Enhancement of assessment is in the process of assessment. It is a procedural power. The liability to tax is created by the statute. Therefore, when the power to assess is attracted a fortiori enhancement is within the power. 28. For the foregoing reasons we are of opinion that the provision in the State Act imposing penalty for non-payment of income-tax within the prescribed time is not attracted to impose penalty on dealers under the Central Act in respect of tax and pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e specific, explicit and expressly provided. Paragraphs 5, 6, 7 and 8 of Orient Fabrics Pvt. Ltd. (Supra) read as under: 5. In order to appreciate the issue, it is relevant to set out the sub-section (3) of Section 3 of the Act, as applicable in this matter and which runs as under: "SECTION 3: Levy and collection of additional duties: (1)........................... (2)............................... (3) The provisions of Central Excise and Salt Act, 1944 and the rules made thereunder including those relating to refund and exemptions from duty shall, so far as may be, apply in relation to the levy and collection of the additional duties as they apply in relation to the levy and collection of the duties of excise on the goods specified in sub-section (1)." 6. A perusal of the said provision shows that the breach of provision of the Act has not been made penal or an offence and no power has been given to confiscate the goods. It only provides for application of the procedural provisions of the Central Excise and Salt Act, 1944 and the Rules made thereunder. It is no longer res integra that when the breach of the provision of the Act is penal in nature or a penalty is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge in the nature of penalty. We further find that the term "levy and collection" in Section 3(3) of the Additional Duties Act has a restricted meaning in view of the use of the words "including those relating to refund and exemptions from duty". Otherwise these words were rather unnecessary. In Orissa Cement V. State of Orissa, the question before the Supreme Court was whether rebate provided in section 13 (8) of the Orissa Sales Tax Act was available to dealers if they paid the tax under the CST Act before due date of payment. The court said that rebate for payment of tax under the CST Act on the reasoning that the power to collect the tax assessed in the same manner as the tax on the sale and purchase of goods under the general sales tax law of the State would include within itself all concessions given under the State Act for payment within the prescribed period. The Supreme Court in Khemka's case observed respecting this case that the reason why rebate was allowed and penalty was disallowed was that rebate was a concessions whereas penalty was an imposition. The concession did not impose liability but penalty did. It, therefore, stood to reason that rebate was included withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere being no such authority of law to levy penalty, we have to hold so. (Emphasis Supplied) This judgment, we are informed, was confirmed by the Apex Court. Therefore, when penalty is additional tax, constitutional mandate requires a clear authority of law for imposition thereof. Where the Act has to be explained by referential legislation or legislation by incorporation levies penalty or not, it is better for the Court to lean in favour of the taxpayer. There is no room for presumption in such cases." 14. To draw home his point of view, the learned CA, Shri Pulak Saha referred to certain provisions of the Customs Tariff Act 1975. The same are arranged at one place for ease of reference and understanding. Relevant portions thereof are as extracted herein: THE CUSTOMS TARIFF ACT- Statutory Provisions (i) Section 3 of the Customs Tariff Act: (For Additional Duty of Customs or CVD): (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a lik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, apply to the duty chargeable under this section as they apply in relation to the duties leviable under that Act. xxxxxxx (Emphasis Supplied) (iii) Section 9A of the Customs Tariff Act: (For Anti-dumping duty on dumped articles-): (1) Where any article is exported from any country or territory (hereinafter in this section referred to as the exporting country or territory) to India as less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. xxxxxxxx (8) (As amended vide Finance (No. 2) Act, 2009 w.e.f. 01.01.1995 (No. 2).) The provisions of the Customs Act, 1962 (52 of 1962) and the date for determination of rate of duty, assessment, the rules and regulations made thereunder, relating to non-levy, short levy, refunds, interest and appeals, offences and penalties shall, as far as may be, apply to the duty chargeable under this section as they apply in relation to duties leviable under that Act. (iv) Section 90 of the Finance Act, 2000: (For- Surcharge of Customs): (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y,- (a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, within one year; (b) in any other case, within six months, from the relevant date, serve notice on the person chargeable with the duty or interest which has not been levied or charged or which has been so short-levied or part paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: Provided that where any duty has not been levied or has been short-levied or the interest has not been charged or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter, the provisions of this sub-section shall have effect as if for the words "one year" and "six months", the words "five years" were substituted: Provided further that where the amount of duty which has not been levied or has been short-levied or erroneously refunded or the interest payable has not been paid, par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zette, fix, shall be paid by the person liable to pay duty in terms of Section 28 and such interest shall be calculated from the first day of the month succeeding the month in which the duty ought to have been paid or from the date of such erroneous refund, as the case may be, up to the date of payment of such duty. (3) Notwithstanding anything contained in sub-section (1), no interest shall be payable where,- (a) the duty becomes payable consequent to the issue of an order, instruction or direction by the Board under Section 151A; and (b) such amount of duty is voluntarily paid in full, within fortyfive days from the date of issue of such order, instruction or direction, without reserving any right to appeal against the said payment at any subsequent stage of such payment." (iv) Section 28AB- Interest on delayed payment of duty in special cases- (Rescinded) (1) Where any duty has not been levied or has been short levied or erroneously refunded by reason of collusion or any willful mis-statement or suppression of facts, the person who is liable to pay the duty as determined under sub-section (2) of section 28, shall, in addition to the duty, be liable to pay interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I & Ors, and laid emphasis on the following paras of the said judgement. As the context herein demands, some of the said paras are recorded below: "20. Section 28AB of the Customs Act, 1962 is a taxing provision which creates and fastens the liability on a party. The provision has to be strictly construed and will be governed by the language employed in the section. The Apex Court in the matter of India Carbon Ltd. & Ors. V. State of Assam (1997 (6) SCC 479), relied upon by Mr. Sridharan, after quoting paragraph 16 of J.K. Synthetics Ltd. (Supra), held that the proposition that may be derived from J.K. Synthetics Ltd. (Supra) is 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. The Court held that where there is no substantive provision requiring the payment of interest, the authorities cannot, for the purpose of collecting and enforcing payment of tax, charge interest thereon. 21. It is petitioner's case, as noted earlier, that provision relating to interest and penalty are not borrowed under Finance Act, 2000 and under Section 3 and 3A of the Customs Tariff Act, 1975, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g provisions. The Court held that there must be specific provision to create liability........................" 18. The appellant further submitted that interest can be levied and charged on delayed payment of tax only, if the statute that levies and charges the tax makes substantive provisions in this behalf. They invited reference to the apex court's decision in the case of India Carbon Ltd. ETC. Vs. State of Assam wherein because of no substantive provision in the Central Sales Tax Act, levy of interest on delayed payment of Central Sales Tax under the provisions of Section 35A of the State Act, were held to be bad in law. The appellant therefore, submits that provisions contained in Section 28AA of the Customs Act having not been borrowed in the legislation imposing levy of CVD, that is the Tariff Act and therefore, no interest can be demanded from them, even if it were to be argued that the appellant had derived financial benefit by not paying the correct duty as due, at the material time. 19. We have heard the rival submissions and perused the case records. For a comprehensive consideration of the arguments made by the appellants, it would be imperative to threadbare discu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where a person, chargeable with the duty determined under sub-section (2) of section 28, fails to pay such duty within three months from the date of such determination, he shall pay, in addition to the duty, interest [at such rate not below [ten per cent.] and not exceeding thirty six per cent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette], on such duty from the date immediately after the expiry of the said period of three months till the date of payment of such duty: Provided that where a person chargeable with duty determined under sub-section (2) of section 28 before the date on which the Finance Bill, 1995 receives the assent of the President, fails to pay such duty within three months from such date, then, such person shall be liable to pay interest under this section from the date immediately after three months from such date, till the date of payment of such duty. Explanation 1.- Where the duty determined to be payable is reduced by the Commissioner (Appeals), Appellate Tribunal [National Tax Tribunal] or, as the case may be, the court, the date of such determination shall be the date on which an amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the said payment at any subsequent stage of such payment. 23. As the provisions pertaining to liability and payment of interest are inextricably intertwined with that of demand for payment of duty/liability and to pay Customs duties as determined, it would be appropriate to reflect on the said provisions of law as well. Thus Section 28 of the Customs Act effective 08.04.2011 (i.e. for the material period) which read as under is recorded below: "SECTION 28.- Recovery of duties not levied or short-levied or erroneously refunded.- (1) Where any duty has not been levied or has been short-levied or erroneously refunded, or any interest payable has not been paid, part-paid or erroneously refunded, for any reason other than the reasons of collusion or any willful mis-statement or suppression of facts,- (a) The proper officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty or interest which has not been so levied or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; (b) The person chargeable wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in full or in part, as may be accepted by him, and the interest payable thereon under section 28AA and the penalty equal to twenty-five per cent of the duty specified in the notice or the duty so accepted by that person, within thirty days of the receipt of the notice and inform the proper officer of such payment in writing. (6) Where the importer or the exporter or the agent or the employee of the importer or the exporter, as the case may be, has paid duty with interest and penalty under sub-section (5), the proper officer shall determine the amount of duty or interest and on determination, if the proper officer is of the opinion- (i) that the duty with interest and penalty has been paid in full, then, the proceedings in respect of such person or other persons to whom the notice is served under sub-section (1) or sub-section (4), shall, without prejudice to the provisions of sections 135, 135A and 140 be deemed to be conclusive as to the matters stated therein; or (ii) that the duty with interest and penalty that has been paid falls short of the amount actually payable then, the proper officer shall proceed to issue the notice as provided for in clause (a) of sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other case, the date of payment of duty or interest. Explanation 2.- For the removal of doubts, it is hereby declared that any non-levy, short-levy or erroneous refund before the date on which the Finance Bill, 2011 receives the assent of the President, shall continue to be governed by the provisions of section 28 as it stood immediately before the date on which such assent is received." 24. It is settled law and oft repeated, that in a taxation statute every word used in the law is to be read into and nothing can be added or omitted to arrive at intended or assumed meaning to expand the prescription of law. Suffice to say that the law in taxation matters is to be read as it is and not what it ought to be, in the mind and understanding of the authority concerned. It would therefore be meaningful to analyze the legal postulates concerned with the subject matter and as to how the Courts have held onto comprehend the issue. 25. In the context it is imperative to understand what is duty. Section 2(15) of the Customs Act defines the words "duty" as....................... "means a duty of Customs leviable under this Act." It may be noticed that in this definition the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re assigned a specific rate of duty as may be so stated in the charging enactment thereof, the like of Customs Tariff Act- Schedule I for instance. (ii) Similar, interpretation is inferenceable with reference to the word "duty" as used in Section 16 of the Customs Act, (a provision for determining relevant date for levy of duty on export goods). (iii) Also another important area concerned with leviablility of duty is exemption. It be noted that in Section 25 of the Customs Act that provides for grant of exemption from duty, the power to grant exemption from the basic duty of customs, (Section 25 of the Customs Act) flows from this section, empowering the Central Government with powers to provide for such exemption from payment of duty, with or without conditions, as may be specified. In so far as other duties leviable on imported goods are concerned it may be noted, that Section 3 of the Customs Tariff Act 1975 which provides for the leviability of Additional Duty of Customs on imported goods, or that on the raw-materials consumed in the manufacture of imported goods (a component of excise duty leviable on raw-material components and ingredients used in the production or manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umping in certain cases. 29.1. The purport of the premise stated in para above is to bring out the existential difference in law with regard to different kinds of duties leviable and the difference in the manner of their being dealt with under the Customs Laws in so far as refund thereof is concerned. Similar, inference emanates while considering other aspects in law as regards application of duty or tax or cess vis-à-vis penalty, fine or interest or other regulatory provisions of the statute. 30. In the backdrop of the aforesaid discussion it is now imperative to consider the provisions relating to leviability of interest under Section 28AA. For ready appreciation and a detailed analysis thereof, the provisions dealing with payment of interest under the Customs Act 1962 are reiterated and enumerated below (earlier referred to in para 15(iii)). Their reiteration herein is to help undertake a word by word, clause by clause or a phrase by phrase analysis of the same. "28AA. Interest on delayed payment of duty.- (1) Notwithstanding anything contained in any judgment, decree, order or direction of any court, Appellate Tribunal or any authority or in any other provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovides for a situation where no interest was payable. Thus, to appreciate the automatic or the mechanical application of interest, it would be foremost to state that the law itself fastens it on the incumbent by stating "is liable to pay duty in accordance with the provisions of Section 28" [refer Section 28AA (1)]. Also, it is important to note that the words "liable to pay duty" cannot be read in isolation of the remaining part of the phrase. It has to be read in conjunction with the rest of the sentence which reads "................ in accordance with the provisions of Section 28." Thus it is quite clear as to what has been further borrowed for the realization of interest payable and applicability as an automatic route, are the structural elements of Section 28. Therefore, the very sub-section itself heralds both leviability and realization of the interest fastened onto the short paid duty. Moreover, there can be no disagreement over the fact that a non-obstante clause is added to a provision in order to uphold its enforceability over anything that may be held contrary thereto and assists the digging out and clarifying the legislative intent. Viewed in the context we do not fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e two schedules of the Tariff Act. Furthermore Section 12 of the Act provides for prescribing the rate of customs duty leviable under the Tariff Act. No such proposition flows in respect of duties as are leviable under the Tariff Act like Section 3 or Section 9A ibid. Restricting the scope of prescribing the duty rates to the Schedules of the Tariff Act is nowhere provided for in law. It is important to read the provisions of the two laws in conjunction and not one to the exclusion of the other. As a matter of fact Section 2 of the Tariff Act cannot be read to the exclusion of the provisions of Section 12 of the Act. Section 12 of the Act cannot derive an effective meaning without a conjoint reading of the two enactments. So much for the relationship matrix amongst the said provisions of the two statutes in the context of the arguments made by the learned C.A. for the appellant, stating the obvious but aligning the scope of Section 12 of the Act to/vis-à-vis Section 2 of the Tariff Act to the two Schedules of the Tariff Act. Table 34. Usage of Tax Specific Terminologies in various Sections of the Tariff Act Sr. No. Description Section 3(8)/[─ 3(12)] Section 8B(9) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicial proceedings. Thus the plea taken by the appellant in support of their argument for non-levy of interest on the short paid additional duty of customs is far from convincing and cannot be accepted. The word -"INCLUDING"- a perspective 35. As per Justice R.P Sethi's, treatise "The Supreme Court on Words and Phrases"- Third edition the term "include" is described as: The word "include" in the statutory definition is generally used to enlarge the meaning of the preceding words and it is by way of extension, "include" is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used, these words or phrases be construed as comprehending, not only such things as they signify according to their natural import but also include. (Regional Director, Employees State Insurance Vs. High Land Coffee Works of P.F.X. Saldanha and Sons and another (1991) 3 SCC 617). 36. The Black's Law Dictionary- Seventh edition, for the term include has the following to take note of: "include, vb. To contain as a part of something. The participle including typically indicates a partial list < the plaintif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncludes" also flows from the ruling of the Hon'ble Apex Court in the case of C.I.T., Andhra Pradesh Vs. M/s. Taj Mahal Hotel, Secunderabad. (AIR 1972 SC 168) The Hon'ble Court in the said case had to state, the following: "The word "includes" is often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute. When it is so used, those words and phrases must be construed a comprehending not only such things as they signify according to their nature and import but also those things, which the interpretation clause declares that they shall include." 41. The Hon'ble Apex Court reiterated the proposition in understanding of the term "includes" in the case of Narmada Bachao Andolan Vs. Union of India, (AIR 2005 SC 2994) as well as in the case of Godfrey Phillips India Ltd. & Anr. Vs. State of U.P. & Ors. (AIR 2005 SC 1103) 42. Justice G.P Singh in his treatise "Principles of Statutory Interpretation" (10th Edition 2006), noted that where the word defined, is declared to include such and such, the definition is prima facie extensive. It is therefore evident that the word includes when used in interpretation clauses ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) defines raw material as "goods used as an ingredient in the manufacture of other goods and includes preservatives, fuel and lubricant required for the purpose of manufacture." In this case, diesel was used as fuel for making electricity, which was used for making the end product, polyester yarn and fabric. The revenue contended that diesel was not a raw material at all for polyester yarn. The Supreme Court, despite the fact that diesel was used for the generators needed for production of the ultimate product, however held that the manufacturer purchased diesel as raw material and utilized the same. 46.1. The Supreme Court held that "the word 'includes' gives a wider meaning to the words or phrases in the statute. It further held that "the word 'includes' is usually used in the interpretation clause in order to enlarge the meaning of the words in the Statute. When the word 'include' is used in the words or phrases, it must be construed as comprehending not only such things as they signify according to their nature and impact but also those things which the interpretation clause declares they shall include" (para 23). The Supreme Court went at length to establish that the fuel is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion on the construction of the will of the testator, Abe Lyons. "The will was dated 16th June 1928. The testator died on 26th July 1930, after an illness which began early in June. On 8th June 1930, he was moved to hospital, where he remained until his death. During that time he was mentally incapable of looking after his affairs. He was a member of the firm of Lyons and Marks, and spent most of his time travelling for the firm, only returning to town for weekends. He lived alone in one room in Euclid Avenue, Toronto. The appellant, Kenneth Joseph was in the confidence of the testator, looking after his private financial affairs. He and the testator each had a key of a safety deposit box in their joint names at the Dominion Bank, in which securities of the testator were kept. The appellant opened this once a month for the purpose of detaching coupons and other purposes connected with the securities. He also, at the testator's request, procured a duplicate key of the drawer hereinafter mentioned in the desk in his room. Under these circumstances, the testator made his will. It was prepared by his solicitor on his instructions. The will is in paragraphs. Para. 1 contains the usua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l connexion with the testator such as articles of personal or domestic use or ornaments clothing furniture and so forth which would not include money or securities for money or whether in the actual contents it extends to the choses in action represented by the pass books and the promissory notes. Their Lordships are of opinion that the former is the true construction. The bequest is one of personal effects and it cannot properly be said that by the mere direction to include the desk with its contents he intended so to enlarge the scope of the bequest as to include property not within the term "personal effects," and the inclusion of which would convert the bequest into a pecuniary legacy of over $30,000. Probably the testator regarded the pictures, the chiffonier and the desk as of a special description making it desirable ex abundanti cautela to mention them as being in his view, covered by the terms of the bequest, and considerable support is afforded to this view by the bequest in para 3. That is a bequest of jewels, including two particular jewels in a safety deposit vault and not in his own room. The use of the word "including in this paragraph clearly did not extend the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of specialised civil Courts viz. Labour Courts and Industrial Courts that are not included in the definition, State of Maharashtra Vs. Labour Law Practitioners Association. (AIR- 1998 SC 1233) 53. The words "including the power to punish for contempt of itself" in Article 129 of the Constitution which declares the Hon'ble Supreme Court to be a Court of record, were held not to limit the inherent powers of the Apex Court as a Court of record to punish for contempt of itself and as also of the subordinate courts (Delhi Judicial Service Association Vs. State of Gujarat. (AIR 1991 SC-2176) 54. The fact of term/word "include" being attributed an expansive meaning is clear from the following decision of the Hon'ble Apex Court in the case of CIT, Andhra Pradesh Vs. Taj Mahal Hotel, Secunderabad. "In holding that sanitary and pipe line fittings in a building which is run as a hotel fall within the word "plant" in Section 10(2)(vi-b) of the Income-tax Act, 1922, for grant of depreciation allowance, Grover J referred to the definition of "plant" in Section 10(5) of the Act and observed: The very fact that even books have been included shows that the meaning intended to be given to "p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of an extension, dismissing the plea for a narrow restrictive interpretation to the term. Case Law Analysis on "interest" applicability in connection with duty as determined payable, under the Customs Act. 58. There are umpteen cases wherein the various Courts have repeatedly upheld the enforceability and the applicability of the interest element, be it with reference to a refund claim or a demand matter as may arise with reference to the additional duty of customs leviable under Section 3 of the Tariff Act. We would for records like to refer to some of such cases hereinbelow, as would also be suggestive of the counter narrative to, as championed by the appellant. Thus The Hon'ble Madras High Court in the case of KSJ Metal Impex (P) Ltd. Vs. Under Secretary (Cus), M.F. (D.R.), (2013 (294) ELT 211 Mad.) directed payment of interest on the delayed refund. While the Hon'ble Court was also concerned in the matter, with the implication of CBEC circular No. 6/2008 dated 28.04.2008, that being not germane to the issue herein is not being dwelt upon. The Hon'ble Court inter alia was of the view that- "The claim for refund is contingent on complying with the requirement as specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the provisions of the Customs Act, 1962." and without the usage of the term and incorporation of the word "interest" in Section 3(8) (then) or 3(12) (now) granted the interest as leviable under Section 27A of the Customs Act. 59. Let us consider some other cases where interest was held payable by the Courts either on refund of duty of paid, or recovery of short paid duty, arising out of levy under Section 3 of the Tariff Act, i.e. CVD or Additional Duty of Customs or other provisions of the act ibid. While we have already elaborated upon the case of KSJ Metal Impex Vs. Under Secretary (Cus.) MF (DR) where the Hon'ble High Court pointed out consequences of any default in refund would follow, in the case of MM Enterprises Vs. Commissioner of Customs, Chennai IV, (2021 (376) E.L.T. - 503 Mad.) pertaining to a similar case of special additional duty leviable under Section 3 of the Tariff Act, the Hon'ble Court held that the respondent (Commissioner) was "duty bound" to pay interest in terms of Section 27A of the Act for the delayed refund payable under Section 27 of the Act. 60. In the case of SR Polyvinyl Ltd. Vs. Commissioner of Customs (ICD), TKD, New Delhi, (2020 (371) ELT 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be refunded under sub-section 2 to 27, if not paid within three months from date of receipt of application under sub-section 1 to Section 27, interest would be paid by the authorities as per the rate specified. In other words, if the refund is paid within three months of date of receipt of application under sub-section 1 to Section 27, no interest is payable. Interest is payable on delayed refunds after three months post the application for refund till the date of refund. Section 27A therefore ensures prompt decisions and payment of refunds, when due and payable under sub-subsection 2 of Section 27 of the Act. 14. .....xxxxxxxx 15............This decision also refers to drawback refunds and exemptions shall apply to SAD as far as may be. Thus, SAD levied under the Customs Tariff Act is a duty within the meaning of Section 27, and refunds under sub-section 2 to Section 27 A of the Customs Act when delayed beyond 3 months from date of application, interest would be payable in terms of and as per Section 27A of the ..................Customs Act." 62. The Hon'ble Karnataka High Court in the case of Commissioner of Central Excise, Bangalore Vs. Kenna Metal Widia (India) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntent of legislature was to invite reference to Customs provisions only to the three specified areas of customs working, viz. drawbacks, refunds and exemption from duties. That, however not being the case, it automatically falls in place that all the provisions of the Customs Act and the rules and regulations are essentially dovetailed into, for consideration and applicability in the Customs Tariff Act, 1975 disregard of all ifs or buts. It is only the penal provisions that need a strict construction, while such is not the case with any machinery provision of a legislation. Thus the appellant is duty bound to pay the interest demanded, moreso when the demand for duty is as enshrined and in accordance with law and admittedly not disputed by the appellant. 66. It may be worthwhile to mention that in the case of Commissioner of Central Excise Vs. SKF India Ltd. in Civil Appeal No.5190-91/2008, while upholding the adjudicating authority's order for payment of interest for delayed payment of duty (due to upward revision of prices), the hon'ble apex court had gone by the principle of "consequences of failure" to discharge the obligation in law, that can also be termed as automatic appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the ratio decidendi are distinguishable as obiter dicta and are not authoritative. In our opinion, therefore Section 3 of the Tariff Act (including its subsection 8) interpreted on its own language or along with Section 28AA of Act are not ambiguous. The mischief, if any ought to be suppressed with the aid of internal tools like the non-obstante phraseology or the text and the head note of the sections, besides giving the words used in law their ordinary meaning. The apex court in the case of Doypack Systems (Pvt.) Ltd. Vs. UOI, (1988 (36) ELT 201 SC) observed that words used in the statute must prima facie, be given their ordinary meaning and where the grammatical construct is clear and manifest, without a doubt the said construction ought to prevail, but for strong and obvious reasons to the contrary. In the said case on the aspect of the term "Includes", it held that: "It is well settled that the word includes' is an inclusive definition and expands the meaning." 69. Despite non-incorporation of the word "interest", in sub-section 3(8) of the Tariff Act, adopting the various provisions of the Customs Act, the Hon'ble Delhi High Court in the case of Principal Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it had noted and discussed at length several of the judgements referred to by the appellant, in arriving at its decision, it would be pertinent to go through the following paras of the Hon'ble Courts order:- "28. We may now proceed to consider the third proposition, whether provisions for interest under the Customs Act are not incorporated either under Section 3 or under Section 3A of the Customs Tariff Act. We may first refer to the relevant provisions of Section 3(1) and 3(6) which read as under:- "3. Levy of additional duty equal to excise duty. - (1) Any article which is imported into India shall, in addition, be liable to a duty (hereinafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article. Explanation. - In this section, the expression "the excise duty for the time being leviable on a like article if produced or manufactured in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 that the Customs Tariff Act, 1975 provides for interest. It is in this context that this Court would have to consider the true import of the meaning of the expression that that provisions of the Customs Act, Rules and Regulations made thereunder as far as may be, apply to the duty charged under this Act. It is no doubt true that the provisions of Customs Tariff Act themselves do not provide for interest. However, we may gainfully refer to the expression "duty" under Section 2(15) of the Customs Act, which reads as under:- ""duty" means a duty of customs leviable under this Act." A reading thereof would indicate that the provisions of the Customs Act pertaining to duty would also apply duty payable under the Customs Tariff Act. The law as now settled is that the charging Section for Customs Duty is Section 12 whereas the charging Section in so far as the Customs Tariff Act is Section 3. However, relevant for our discussion would be the Sections 3, 3A and their relevant sub-sections. Would a construction of these provisions, result in holding that interest be treated as having been incorporated under the provisions of the Customs Tariff Act, 1975. The provision for int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be penal in character." (Emphasis Supplied) Thus this decision of the Hon'ble High Court, evidently lays to rest the question of law and the dispute concerned in the present matter. 72. It may not be out of place to state that the Hon'ble Apex Court in the case of Pioneer Silk Mills Ltd. (supra), had the following to say for the liability to pay interest: "18. Once, therefore, duty is ascertained then by operation of law, such person in addition shall be liable to pay interest at such rate as fixed by the Board. The concerned Officer, therefore, in the ordinary course would be bound once the duty is held to be liable on account of collusion, wilful misstatement or suppression of facts to call on the party to pay interest as fixed by the Board at the relevant time." (Emphasis Supplied) 73. Furthermore, even the hon'ble Andhra Pradesh High Court in the case of Commissioner of Customs, Vishakhapatnam Vs. Gayatri Timber Pvt. Ltd. (2019 (367) ELT 772 AP.) not only upheld the orders of the lower authority directing payment of interest in respect of a refund claim of Special Additional Duty leviable under Section 3 of the Tariff Act, but also went into greater depths and anal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under Section 3 of the Tariff Act. It belies logic to say that if interest is applicable to cases of refund, it would not be so for demand cases. Interest and Penalty- Two Varying Concepts- (A Brief Commentary) 78. As the appellant has relied upon several pronouncements of the higher judiciary, rendered in the context of affixing penal liabilities in support of their proposition, it is vital that imposition of penalty and affixation of interest are understood in their proper frame, background and objective. 79. The penalty provisions are generally understood to be an integral part of an assessment process and collection of duties of which the necessary adjuncts includes confiscation as well. Without penalty provisions, the tax imposition would lack teeth and become ineffective (Ref-Ashok Fashions Ltd. (2002 (1) TMI 65 Guj). In fact shorn of the power to impose penalty, the Courts have even held the reduction of the taxation provisions to a "donation drive." Certainly this is not the case with the obligation for payment of interest. Penalty and interest imposition can therefore not be equated. Interest is actually payable on grounds of equity and hence cannot be equated with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and hence unacceptable, as far as Section 3 of the Tariff Act with all its appendages is concerned with. The fact of noninclusion of even a single word pertaining to "demand of duty," in subsection 3(8) (now sub-section 3(12) in the context would even render inapplicability of Section 28 of the Customs Act, if the analogy as propounded by the learned CA is considered to be of sufficient merit and if the phrase "The provisions of the Customs ............................including those relating to drawbacks, refunds and exemption from duties......................." is read to mean and apply to only the said three aspects of Customs laws. Thus, as explained hereinabove, the enactment would be rendered as a futile and hollow proposition of law, if a parallel consideration as assigned to the interpretation of "penalty" is also assigned to the term "interest" and both are read in the same vein. 82. We are afraid that in the legal aspect and discussions concerning the present matter, the appellant's stand of adding the word "interest" suo moto as to be read alongside the word "penalty," in the Apex Court's ruling to the aspect of penalty imposition, cannot be subscribed to in law. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om Duties (Section 25) of the Customs Act alone are supposed to be rendered applicable. This would lead to a chaotic situation where the enforceable of recovery of short paid duty is tied down and prevented from legally enforcement action and would be completely dependent upon the willingness and the disposition of the assessee to make good the said "charge". Such a situation of "interpretative legal anarchy" is absolutely incomprehensible in law and the said interpretation is nothing short of an absurdity and a legal folly. The appellant themselves have advocated, that for tax levy, a charge is first created by insertion of a charging section in the statute book, followed by a mechanism/machinery to render the liability created effective and the mode for the recovery and collection of the tax, including penal provisions to cater to a situation of default or aberration. This is followed by other related mechanisms like levy of interest, grant of incentives etc. Thus, in the given context while the appellant has vehemently argued about the inapplicability of interest, they have then also failed to demonstrate the machinery adopted to make the realization of the tax feasible, by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility incurred by a debtor on account of his being a wrongdoer or a violator in law and for which creation of a specific charge for its imposition is essential. Thus while liability to pay interest is founded on the doctrine of compensation, imposition of penalty is based on the doctrine of punitive action. Penalty in common parlance can be understood to mean a legal punishment- be it in the form of a forfeiture, imprisonment or imposition of a monetary cost or charge and its meaning can be derived from the gathering wherein the word is actually put to use, whereas interest can be considered as a compensation fixed by the authority of law for use or detention of money, or for the loss of money by one entitled for its usage. 85. The Hon'ble Apex Court in the case of Pratibha Processors and Ors. Vs. Union of India and Ors, (1996 (11) SCC-101) while dealing with the import of words tax, interest and penalty observed as under: "14. In fiscal statutes, the import of the words -- "tax", "interest", "penalty", etc. are well known they are different concepts. Tax is the amount payable as a result of the charging provision. It is a compulsory exaction of money by a public authority for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Article 265 of the Constitution for enforcing its levy and collection, though it is undisputed that interest has its bearings with duty not paid and hence a dependent variable of such circumstances. 88. The Hon'ble Allahabad High Court as maintained by the Hon'ble Apex Court in the case of Kamrup Industrial Gases Ltd. Vs. CEGAT, New Delhi, (2004 (172) ELT 454 Allahabad), held that provision of the statute have to be so used to make it meaningful and the construction that would reduce the provision to "useless lumber" or a "dead letter" was not enshrined in law and repugnant to general principles of interpretation. In the context of a harmonized construction, the Hon'bel Court very specifically stated in the said case "the provision of one section of the statute cannot be used to defeat those of another unless it is impossible to effect reconciliation between them". 89. Thus, if the language of the statute in the then Section 3(8) of the Tariff Act or now Section 3(12) ibid are held to limit the scope of the provision to the arenas of drawbacks, refunds and exemptions from duties and not to include other measures required as for a smooth holistic working of a tax statute, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orated the interest provision (Section 28AA) in the Customs Act, and as rendered applicable to the Tariff Act, the appellants are not justifiable in seeking to derive support from the judgments cited by them, as the rulings pronounced by the superior courts in the said cases would not be apposite for consideration of the question of interest which arises in the present case. This is so as the said judgments were delivered essentially in the context of penal provisions or with reference to issues concerned with settlement of case a variation/deviation from the applicability of routine structural legal process. Thus, those decisions would be irrelevant for deciding the issue in the present matter concerned with the liability to pay interest in terms of the statutory provision of the Customs Act as rendered applicable to the Tariff Act (Section 3). 94. An important case having a bearing in the present matter is that of Union of India Vs. Valecha Engineering Ltd. (discussed in depth separately, elsewhere in this order). While the issue concerned therein was the refund of interest paid voluntarily and as directed by the Settlement Commission. In appeal the Hon'ble High Court however, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the Orient Fabrics Pvt. Ltd. case, which was primarily concerned with provisions pertaining to penalty and not interest. It would be worth reproducing the relevant extract of the decision of the Hon'ble Court as concerns aspects relevant to the present case: "30.................... We may now refer to Section 28AA. Under Section 28AA interest becomes automatically payable on failure by the assessee to pay duty as assessed within the time as set out therein. Similarly, under Section 28AB on duty being ascertained as under Section 28 interest is payable by operation of law. In a case, therefore, where duty has been ascertained as due under the Customs Tariff Act, 1975 by the machinery under the provisions of the Customs Act if the provisions of Sections 3 and 3A are read in their proper context, then Section 28 would first be attracted. No interest will be payable under Section 28AB if the predicates of under Section 28 are not satisfied. Therefore, in a case of non-payment of duty of the payment or erroneous refund even under the provisions of the Customs Tariff Act, 1975, Section 28 would be attracted and once duty is ascertained under Section 28 interest becomes paya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lative intent, is required to be adopted. The mandate of the legislature is required to be interpreted to advance the purpose of the legislation, equally in all situations. Thus, reading down the law, as held by courts in several such rulings does not advance the case of the appellants. 99. Moreover, there can be no dispute, to the premise and as oft stated by apex court that where two reasonable constructions are possible, but one leads to an anomalous situation while the other advances the intention of the legislature, it is for courts to adopt the latter. Indo-China Steam Navigation Co. Ltd. Vs. Jasjit Singh, Addl. Collector of Customs, Calcutta & Ors. [1983 (13) ELT 1392 SC]. The dominant purpose in construing a statute is to ascertain the intention of the legislature as arises from the statute, considering it as a whole and in its context. A Judgement - is an authority for what it decides 100. How should a judgement be read and understood: It is common knowledge that a ratio of a decision has to be culled out from the facts of the particular case and a decision is an authority for what it decides and not what can be logically deduced. An exception to a normal provision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f C. Ex., Calcutta Vs. Alnoori Tobocco Products, (2004 (170) ELT 135 (SC)) citing the words of Lord Denning: "14. The Following words of Lord Denning in the matter of applying precedents have become locus classicus: Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive." (Emphasis Supplied) 103.1. Further, guiding the judicial and quasi judicial entities the apex court observed as follows: "11. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich, when it is clear what it was, is binding. It is only the principle laid down in the judgment that is binding law under Article 141 of the Constitution. A deliberate judicial decision arrived at after hearing an argument on a question which arises in the case or is put in issue may constitute a precedent, no matter for what reason and the precedent by long recognition may mature into rule of stare decisis. It is the rule deductible from the application of law to the facts and circumstances of the case which constitutes its ratio decidendi. Therefore, in order to understand and appreciate the binding force of a decision is always necessary to see what were the facts in the case in which the decision was given and what was the point which had to be decided. No judgment can be read as if it is a statute. A word or a clause or a sentence in the judgment cannot be regarded as a full exposition of law. Law cannot afford to be static and therefore, judges are to employ an intelligent in the use of precedents......................" (Emphasis Supplied) 104.1. We are therefore, afraid of ascribing any support to the pleadings of the learned Representative for the appellant. 105. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n from duties, so far as may be apply to the duty chargeable under this Section as they apply in relation to the duties leviable under the Customs Act, 1962. 106. Thus a restrictive and narrow interpretation of term "including" cannot be assigned and adopted in the given context. It belies logic to so do, as it defeats the very purpose of the statutory provisions including certain beneficial piece(s) of legislation which certainly is not and cannot be the intent of the legislation. For a moment, even for argument sake, the law, is understood to be the way the appellant pleads before us, it automatically dwells upon, that the word "assessment" as obtained in Section 9A (8) of the Tariff Act is missing and found wanting, as regards the material provisions of Section 3 of the Tariff Act. That by natural implication would therefore mean that even the basic postulate of "assessment" would fail as far as Section 3 ibid is concerned. Thereby to infer that even no assessment of such "leviable" additional duty of Customs can be undertaken, as the term assessment is not specifically included in the relevant provisions of Section 3 would not only be foolhardy but downright illegal and moroni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that the provisions concerned with filing of Bill of Entry, or the clearance of imported goods for home consumption upon payment of duty are/were rendered applicable to the provisions of the Tariff Act. If the said provisions are applicable to the present case (which in fact are), there can be no escape from payment of interest as applicable. For sake of greater clarity, Section 47 of the Customs Act as it stood at the relevant time is recorded below:- "47. Clearance of goods for home consumption.- [1] Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption. [(2)] where the importer fails to pay the import duty under sub-section (1) [within] [two days] excluding holidays from the date on which the bill of entry is returned to him for payment of duty, he shall pay interest [at such rate, not below [ten per cent.] and not exceeding thirty six per cent per annum, as is for the time being fixed by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stos fibre, and were in particular analysing the implication of the words "if produced or manufactured in India", as used in Section 3(1) of the Tariff Act, Justice Kripal had the following to say, on behalf of the other judges of the Constitution Bench. "14. There are different types of customs duty levied under different acts or rules. Some of them are, (a) a duty of customs the duty in question, chargeable under Section 12 of the Customs Act, 1962: (b) namely, under Section 3(1) of the Customs Tariff Act; (c) additional duty levied on raw-materials, components and ingredients under Section 3(3) of the Customs Tariff Act; and (d) duty chargeable under Section 9A of the Customs Tariff Act, 1975. Customs Act, 1962 and the Customs Tariff Act, 1975 are two separate independent statutes. Merely because the incidence of tax under Section 3 of the Customs Tariff Act, 1975 arises on the import of the articles into India it does not necessarily mean that the Customs Tariff Act cannot provide for the charging of a duty which is independent of the customs duty leviable under the Customs Act." (Emphasis Supplied) 110. Nonetheless, even though the aforesaid observation of the Hon'ble Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies), it would be prudent to state the obvious, that the provisions pertaining to the Customs Act and the Tariff Act (Section 3), and those in respect of Central Sales Tax Act and the State Sales Tax Act referred to in the order viz Section 9 of the Central Sales Tax Act have no commonality of the purport of the law, the subject under consideration and the nature of the issue in appeal. Under the circumstances proposing to import the ratio thereof in the present case, does not fall through in place. Incidentally, taking note of the two diverse outcomes arrived at by the two brother judges on each side Justice Baig in his part of the order states as under :- " I have had the advantage of going through the judgments of the learned Chief Justice and my learned brother Mathew, J. Even if I was of the opinion that the two views on an interpretation of Section 9(2) of the Central Act are equally well entertainable, as one could be on a mere reading of Section 9(2) of the Central act only. I would, with great respect, prefer of the view adopted by the learned Chief Justice on the principle that the assessee must get the benefit of such uncertainty. It, however, seems to me, on a careful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es as to the specific ingredients pertaining to assessment/reassessment/collection etc. and all such terminologies within their broad sphere of understanding are incorporated within Section 9 (2) of the Central Sales Tax Act, as assumed to be applicable by reason of Section 9(3) of the Central Sales Tax Act. (as it stood then). It may be noted that Section 3 of the Tariff Act, but for "drawback", "refund" and "exemption" carry no other aspects of a taxation statute by way of a specific inclusion. That would not ipso facto mean to rule out applicability of the various other ingredients of a tax act, moreso as the opening phrase of the said subsection of the Tariff Act, clearly enacts therein the provisions of the Customs Act. It cannot also be held that in the absence of non-inclusion of other related framework in law including assessment and collection of tax, mere creation of a "charge" would result in its ultimate realization. Thus the meaning and interpretation canvassed by the appellant to our humble understanding cannot be said to be the one intended. 116. Also it is pertinent to point out that amongst the primary reason as ascertained by the Hon'ble apex court in arriving at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made thereunder, including those relating to refunds and exemptions from duty, shall, so far as may be, apply in relation to the levy and collection of the duty of excise or any other sum referred to in this section as they apply in relation to the levy and collection of the duty on sugar or other sums of money payable to the Central Government under that Act or the rules made thereunder." A reading of sub-section (1) of Section 7 above, clearly shows that the subject additional duty leviable had a bearing with the deficit in quantity of the export quota assigned. The Hon'ble Gujarat High Court after elaborate discussions based on cited case laws stated as under: "17. From the principles enunciated in the above referred decisions, 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. In the facts of the present case, as noted hereinabove, 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. In the circumstances there being no substantive p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain decisions of the Courts as already discussed in earlier paras, there is therefore nothing much to elaborate on this particular case, being an outcome of interpretation borrowed from other matters. However, it need to be brought on record, that the provisions of the Sugar Export Promotion Act (SEPA) referred to above, do not contain any non-obstante clause 8 (unlike the provisions of Section 28AA of the Customs Act), whereby to give the said provision an over-riding effect and ensure their primacy over other provisions of the statute. In effect in Section 28AA of the Act, the statute gives the said provision a platform even higher than a judicial pronouncement which ordinarily is not the case. 120. It is however imperative to note the huge chasm in the provisions of law, invoking the interest provisions in the context of Ukai Pradesh Sahakari Khand Udyog Mandli Ltd. (enabled by sub-section(4) of Section 7 of the Sugar Export Promotion Act) vis-à-vis the present appeal (enabled by Section 3(8) the Tariff Act read with Section 28AA. Section 28AA not only starts with a non-obstante clause, creating a legal fiction as to the primacy of the provision levying interest, be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hermore, this decision of the Bombay High Court in the matter has been arrived at based upon several case laws that have been discussed elsewhere in this order namely- * Collector of C. Ex., Ahmedabad Verses Orient Fabrics Pvt. Ltd. - 2003 (11) TMI 75- Supreme Court. * Hyderabad Industries Ltd. Versus Union of India - 1999 (5) TMI 29 -Supreme Court. * India Carbon Ltd. Versus State of Assam (and other appeals) - 1997 (7) TMI 566- Supreme Court. * Khemka & Co. (Agencies) Pvt. Ltd. Versus State of Maharashtra & State of Mysore Versus Guldas Narasappa Thimmaiah Oil Mills - 1975 (2) TMI 91-Supreme Court. * Jain Brothers And Others Versus Union of India And Others- 1969 (11)TMI 1-Supreme Court. * CCE. & C., SURAT-I Versus UKAI PRADESH SAHAKARI KHAND UDYOG MANDLI LTD. -2010 (12) TMI 996-GUJARAT HIGH COURT. * UNION OF INDIA Versus VALECHA ENGINEERING LIMITED- 2009 (8) TMI 451 -HIGH COURT OF BOMBAY. * MAHINDRA & MAHINDRA LTD. Versus UNION OF INDIA - 2008 (9) TMI 382- HIGH COURT OF JUDICATURE AT BOMBAY. * PIONEER SILK MILLS PVT. LTD. Versus UNION OF INDIA- 1991 (9) TMI 93- HIGH COURT OF DELHI. Moreover, despite holding "In the absence of specific provision relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learly enables assessment, reassessment, collection of duty etc. If the law were to be read in the said sense, in respect of Section 3 of the Tariff Act, a serious question would be cast upon the assessment under the Customs Act of the said liability to be taxed, for and because of the non-usage of the very terms pertaining to assessment. This interpretation would make the said provisions of law a fallacy and therefore the argument canvassed, in our respectful submission, originating in the backdrop of the penal provisions and applying them to a case and subject matter of interest payment, flowing from a legal enactment not pari materia, would be an incorrect and a misleading notion, based on an invalid/erroneous reasoning. We therefore are convinced of the inapplicability of the ratio of law in the India Carbon Ltd. case in facilitating the determination of the question involved in the present appeal. (vi) Birla Cement Works & JK Synthetics Ltd., (1994 (5) TMI 233 SC) 129. As for the case of Birla Cement Works & JK Synthetics Ltd., (1994 (5) TMI 233 SC) Commercial Taxes Officer and State of Rajasthan, the said case, no doubt is concerned with payment of interest on the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ratio of the Supreme Court's decision in the aforesaid case rested on the following premise: "20. The matter may be considered from another angle. The Parliament by reason of the Amending Act 32 of 1994 consciously brought in the expression offences and penalties in sub-section (3) of Section 3 of the Act. The mischief rule, if applied, would clearly show that such amendment was brought with a view to remedy the defect contained in the unamended provisions of sub-section (3) of Section 3 of the Act. Offences having regard to the provisions contained in Article 20 of the Constitution of India cannot be given a retrospective effect. In that view of the matter too subsection (3) of Section 3 of the Act as amended cannot be said to have any application at all." 132. The Tribunal relying upon the decision in the case of Pioneer Silk Mills Pvt. Ltd. referred supra had held in the Orient Fabrics Pvt. Ltd. case, that the confiscation provisions cannot be applied thereto. It be noted that question herein, once again, was of a penal consequence- be it by way of forfeiture of goods or imposition of penalty- that would flow by way of non-payment or short payment of duty or any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich have been relied upon by the appellants. * Khemka & Company Pvt. Ltd. Vs. State of Maharashtra, * Pioneer Silk Mills Pvt. Ltd., * India Carbon Ltd. Vs. State of Assam, Relevant para of this decision of the Tribunal in Atul Kaushik's case is extracted below :- "16. The appellants have also contended that penalty, interest and confiscation cannot be invoked in respect of evasion of countervailing duty (levied under Section 3 of the Customs Tariff Act, 1975) on the ground that the provisions relating to these aspects have not been borrowed into Section 3 of the Customs Tariff Act, 1975. In support of the principle that the penalty cannot be levied in the absence of penalty provision having been borrowed in a particular enactment, the appellants cited the judgments in the case of Khemka & Co. (supra) and Pioneer Silk Mills Pvt. Ltd. (supra). We are in agreement with this proposition and therefore we refrain from discussing the said judgments. The appellants also cited the judgement in the case of Supreme Woollen Mills Ltd. (supra), Silkone International (supra) and several others to advance the proposition that penalty provisions of Customs Act were not applicable to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, 1962 had not been borrowed in the respective sections of Customs Tariff Act, 1975 under which these duties were levied, but this decision of CESTAT regarding CVD suffered from the fatal internal contraction inasmuch as CESTAT itself in para 14 of the said judgment had expressly taken note of the fact that vide Section 3(8) of the Customs Tariff Act, 1975, the provisions of Customs Act, 1962 and the rules and regulations made thereunder had been made applicable to CVD charged (under Section 3 of Customs Tariff Act, 1975). In the light of this analysis, we hold that this contention of the appellant is legally not sustainable." Conclusion 136. We find that, as discussed herein, the circumstances of the cases cited by the appellants are different and distinguishable, therefore we are of the view that their ratio cannot be applied to the issue herein. 137. We note that in view of Section 3 of the Tariff Act read with Section 12 of the Customs Act, the special additional duty is to be construed as Customs Duty and therefore in view of the provisions of the law, all the provisions of the Customs Act and Rules/Regulations made thereunder are squarely applicable to the issue at ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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