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TMI Blog2024 (12) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... vying interest on any person who is found ineligible for any benefit received under the terms of any Scheme under the Foreign Trade Policy. It is true that Chapter 3 of the Foreign Trade Policy which was in operation for the period from 01-04-2015 to 31-03-2020 contemplates that if any person is found to be ineligible for the benefit under any Scheme the amount will have to be refunded along with interest u/s 28AA of the 1962 Act. We must hold that the provisions of the Foreign Trade Policy cannot by itself authorise the levy of interest u/s 28AA of the 1962 Act as such levy must be supported by plenary legislation. Petitioner is entitled to succeed. Therefore, this writ petition is allowed. - HONOURABLE MR. JUSTICE GOPINATH P. For the Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the fact that through Ext.P8 communication the petitioner has been informed that the petitioner is also liable for interest under the provisions of Section 28AA of the Customs Act, 1962 (hereinafter referred to as the 1962 Act ). 3. Sri. John Varghese, the learned counsel appearing for the petitioner submits that the petitioner is not disputing the demand for repayment of the amount covered by the duty credit scrip issued to the petitioner and the entire amount has been remitted by the petitioner without demur following issuance of Ext.P4 order. The petitioner is only aggrieved by the demand for interest. It is submitted that a reading of the statement filed by the respondents in this case would indicate that they are basing the demand fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be refunded together with interest calculated in terms of the provisions of Section 28AA of the 1962 Act. 5. Having heard the learned counsel for the petitioner and the learned Central Government counsel appearing for the respondents, I am of the view that the petitioner is entitled to succeed. No provision of the 1992 Act under which Foreign Trade Policy has been framed has been pointed out to show that the provisions of Section 28AA of the 1962 Act have been made applicable for levying interest on any person who is found ineligible for any benefit received under the terms of any Scheme under the Foreign Trade Policy. It is true that Chapter 3 of the Foreign Trade Policy which was in operation for the period from 01-04-2015 to 31-03-2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1940 PC 124 : 67 IA 239] , India United Mills Ltd. v. Commissioner of Excess Profits Tax, Bombay [(1955) 1 SCR 810 : AIR 1955 SC 79 : (1955) 27 ITR 20] and Gursahai Saigal v. CIT, Punjab [(1963) 3 SCR 893 : AIR 1963 SC 1062 : (1963) 48 ITR 1] ). But it must also be realised that provision by which the authority is empowered to levy and collect interest, even if construed as forming part of the machinery provisions, is substantive law for the simple reason that in the absence of contract or usage interest can be levied under law and it cannot be recovered by way of damages for wrongful detention of the amount. ( See Bengal Nagpur Railway Co. Ltd. v. Ruttanji Ramji [AIR 1938 PC 67 : 65 IA 66 : 67 CLJ 153] and Union of India v. A.L. Rallia Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where it was held:- 6. This Court in India Carbon Ltd. v. State of Assam [(1997) 6 SCC 479] has held, after analysing the Constitution Bench judgment in J.K. Synthetics Ltd. v. CTO [(1994) 4 SCC 276] 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. There being no substantive provision in the Act for the levy of interest on arrears of tax that applied to purchases of sugarcane made subsequent to the date of commencement of the amending Act, no interest thereon could be so levied, based on the application of the said Rule 45 or otherwise. 7. In the light of the principles laid down in the judgments referred to above, I am of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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