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TMI Blog2024 (2) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the Division Bench of the High Court in R.H.L. Profiles Ltd. Vs. Commr. Of Cus., Ex. And Service Tax [ 2017 (4) TMI 1252 - ALLAHABAD HIGH COURT] , held that on the amount which was illegally confiscated by the Revenue and ultimately refunded, the assessee-appellant is entitled to interest and the department is under obligation to pay the same. Revenue has retained the redemption money and the penalty amount without any right and therefore in view of the decision of the Hon ble Supreme Court in the case of Tata Chemicals Limited [ 2014 (3) TMI 610 - SUPREME COURT] , we are of the view that respondent is under obligation to grant interest to the petitioner on the whole amount (redemption charges and penalty) and not just on the pre-deposit amount, which was the statutory requirement under Section 129E of the Customs Act, 1962. We accordingly quash the impugned Corrigendum dated 10.02.2023 issued by Assistant Commissioner (Refund) and direct the respondent to refund to the petitioner along with interest at the rate of 6% per annum from the date of the deposit till the date of refund. Respondent is directed to process the refund within two weeks. Petition is disposed of along with p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms Act, 1962. 4. Statement of petitioner was recorded under Section 108 of the Customs Act, wherein, he admitted the recovery of cash and seizure of goods of foreign origin collectively valued at Rs. 92,73,350/- and Rs. 14,10,900/-. 5. The seized goods were released provisionally to the petitioner on 11.09.2008 and 12.09.2008 upon furnishing a bond of Rs. 92,73,350/- and a bank guarantee of Rs. 9,30,000/-. 6. Show Cause Notice dated 03.07.2008 was issued to the petitioner, wherein, he was asked to show cause as to why the electronic goods of foreign origin valued at Rs. 92,73,350/- and the Indian Currency amounting to Rs. 14,10,990/-, belonging to the petitioner, should not be confiscated under Section 111 (d) and Section 121 of the Customs Act, 1962 and why penalty should not be imposed upon him under Section 112 of the Customs Act. Petitioner filed his reply dated 24.12.2008 to the above-mentioned Show Cause Notice. 7. The above SCN was adjudicated vide OIO No. 20-Commr./HKT/2009 dated 29.10.2009, wherein, the Commissioner of Customs, Preventive, Commissionerate, ordered for confiscation of the seized goods worth Rs. 92,73,350/- and also gave an option to redeem the same after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,00,000/- was imposed on the petitioner vide Order dated 29.10.2009, and as such, as per Section 129-E of the Customs Act, 1962, the amount of pre-deposit at the rate of 7.5% of Rs. 2,00,000/- for filing the appeal comes to Rs. 15,000/- and accordingly the interest amount of Rs. 11,954/- on Rs. 15,000/- has been sanctioned to the petitioner vide Corrigendum dated 10.04.2023. Insofar as the interest on the seized cash of Rs. 14,10,990/- is concerned, it has been submitted that the seized cash was lying deposited with the Disposal Branch of the office of the respondent as case property and was never deposited with the Government Exchequer and was thus not in the nature of duty. It is submitted that Section 27-A of the Customs Act deals with interest on delayed refund of duty and Section 129-EE of the Customs Act deals with interest on delayed refund of deposit made under Section 129-E and in the Customs Act, there is no provision for the payment of interest on refund of the seized currency which is in the nature of case property, and as such, no interest is payable on the seized currency. It is submitted that the interest on delayed refund is payable under Section 27-A of the Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is fixed by the Central Government by Notification in the Official Gazette. It is manifest from the Section that deposit of penalty, redemption money or bank guarantee do not fall within the ambit of Section 27-A of the Act, not being custom duty. Thus, Section 27-A is not attracted in the facts and circumstances of the case. 18. Section 129-E of the Customs Act, 1962 is reproduced below:- [129-E. Deposit of certain percentage of duty demanded or penalty imposed before filing appeal. The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal, -- (i) under sub-section (1) of Section 128, unless the appellant has deposited seven and a half percent of the duty in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of customs lower in rank than the Commissioner of Customs; (ii) against the decision or order referred to in clause (a) of sub-section (1) of Section 129-A, unless the appellant has deposited seven and a half percent of the duty in case where duty or duty and penalty are in dispute, or penalty where such penalty is in dispute, in purs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal is not payment of duty. Hence, refund of pre-deposit need not be subjected to the process of refund of duty under Section 11-B of the Central Excise Act, 1944 or Section 27 of the Customs Act, 1962 and therefore in all cases where the Appellate Authority has decided the matter in favour of the appellant, refund with interest should be paid to the appellant within 15 days of the receipt of the letter of the applicant seeking refund irrespective of whether order of the Appellate Authority is proposed to be challenged by the department or not. 22. A combined reading of Section 129-EE and the clarification issued in Para No. 5.1 5.2 of the aforesaid Circular dated 16.09.2014, makes it clear that the interest is payable on the amount deposited for filing the appeal. 23. However, Para-3.1 of the said Circular provides as under:- Payment made during the course of investigation or audit, prior to the date on which appeal is filed, to the extent of 7.5% or 10%, subject to the limit of Rs. 10 crores, can be considered to be deposit made towards fulfilment of stipulation under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962. Any shortfall from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment, there being no express statutory provision for payment of interest on the refund of excess amount/tax collected by the Revenue, cannot shrug off its apparent obligation to reimburse the residents/deductors lawful monies with the accrued interest for the period of undue retention of such monies. The State having received the money without right, and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course. (emphasis supplied) 26. Relying upon the decision of the Supreme Court, the Division Bench of the High Court of Judicature at Allahabad in R.H.L. Profiles Ltd. Vs. Commr. Of Cus., Ex. And Service Tax, Kanpur, reported in 2017 (352) ELT 349 (All.), held that on the amount which was illegally confiscated by the Revenue and ultimately refunded, the assessee-appellant is entitled to interest and the department is under obligation to pay the same. 27. Revenue ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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