Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

Comments

Print   |    |  Comment

PJ/Case law/2014-15/2243

Whether interest admissible for delayed payment of refund even in case of amount paid under protest ?

Case:- RATAN UDYOG VERSUS COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI

Citation:- 2014 (299) E.L.T. 374 (Tri.- Mumbai)

Brief fact:- The appeal arises from Order-in-Appeal No. 255(CRC-1)/2012(JNCH)/Imp-245, dated 8-5-2013 passed by the Commissioner of Central Excise (Appeals), Mumbai-11, JNCH.
The appellant, M/s. Ratan Udyog, Kolkata filed shipping bill No. 2424, dated 21-9-2004 for export of ladies nighties as woven fabrics. Subsequently, he filed another shipping bill declaring the goods correctly under claim for drawback. The case was adjudicated and the goods were confiscated but the appellant was allowed to redeem the goods on payment of fine of Rs.4 lakhs and penalty of Rs.1 lakh vide order dated 11-11-1994. The appellant made the payment of fine and penalty but contested the same before this Tribunal and this Tribunal vide Order No. C11/639/W20/2001, dated 12-3-2001 [(2001 (134) E.L.T. 449 (Tri.- Mum-)] set aside the confiscation as well as redemption fine and the penalty was reduced from Rs. 1 lakh to 10,000/-. Consequent to the Tribunal's order, the Asstt. Commissioner of Customs allowed refund of redemption fine and penalty amounting to 4,90,000/- vide, order dated 29-9.2008. The department was aggrieved of the same and they filed an appeal before the lower appellate authority on the ground of non-examination of unjust enrichment while sanctioning of the refund by the Asstt. Commissioner and the lower appellate authority vide order dated 11-8-2001 allowed the department's appeal. The appellant filed an appeal before this Tribunal once again and vide Order No. A/646/2010/SMB/C-IV, dated 16-11-2010 held that principle of unjust enrichment would not apply to redemption fine and penalty and set aside the order of the Commissioner (Appeals). Consequently, the adjudicating authority vide order dated 9-6-2011 sanctioned the refund of fine and penalty but rejected the claim for interest on the said amount. The appellant challenged the said order before the lower appellate authority, who vide the impugned order has dismissed the appeal. Hence the appellant is before Tribunal.

Appellant’s contention:- The learned counsel for the appellant makes the following submissions.
In the first appeal before this Tribunal, vide Appeal No. C/52/1995 the appellant had prayed for refund of fine and penalty along with interest thereon and this Tribunal had allowed the appeal which would imply that the plea for refund of the amounts paid as pre-deposit along with interest was allowed. The said decision became final and was not challenged by the Revenue before any other appellate authority.
Similarly, when the matter was once again adjudicated by the Tribunal in the second round of litigation, the Tribunal vide order dated 16-11-2010 had allowed the appeal. Thus, the plea of the appellant for allowing interest already stands approved by the Tribunal and, therefore, the same cannot be denied by the lower authorities.
The appellant also submits that as per Section 129EE of the Customs Act, 1962, interest on delayed refund of the amount deposited under the proviso to Section 129E is permissible at the rate specified in Section 27A of the Customs Act, after the expiry of three months from the date of communication of the order of the appellate authority till the date of refund of such amount. In the present case the appellant has been granted refund by the jurisdictional Asstt. Commissioner vide order dated 29-9-2008. However, refund was actually paid to the appellant only oh 9-6-2011 and, therefore, the appellant is eligible for interest under Section 129E as the amount paid by them prior to the confirmation of the demand is only a pre-deposit. The learned counsel also relies on the decision of the  Hon'ble High Court of Bombay in the case of Suvidhe Ltd. v. Union of India - 1996 (82) E.L.T. 177 (Bom.) wherein the High Court ordered payment of interest in respect of pre-deposit made under Section 35F of the Central Excises & Salt Act, 1944. He also relies on the decision of this Tribunal in the case of PAC Systems Pvt. Ltd. v. Commissioner of Customs, Mumbai - 2003 (159) E.L.T. 568 wherein the Tribunal awarded interest on refund of penalty amount of Rs. 20,000/-due to the assessee in consequence of the orders passed on 15.3-1998 but paid only on 5-10-2002. He also refers to the Circular No. 802/35/2004-CX, dated 8-12-2004 issued by the Central Board of Excise and Customs wherein the Board had clarified that pre-deposit must be returned within three months from the date of order passed by the appellate Tribunal or the Court unless there is a stay on the order by a superior Court and if the amount is not refunded within the period of three months the matter will be viewed adversely and default, if any, entail interest liability.

Respondent’s contention:- The Dy. Commissioner appearing for the Revenue reiterates the findings of the lower appellate authority.

Reasoning of judgment:-After hearing both the sides and perusing the records and submissions, it is finally decided at the point that in the present case, the refund become due to the appellant vide order dated 12-3-2001 passed by this Tribunal and the refund was also granted to the appellant vide order dated 29-9-2008 passed by the Asstt. Commissioner of Customs. However, payment of the refund was not made due to dispute in this regard raised by the department and the same was settled against the Revenue and in favour of the appellant vide order dated 16-11-2010 and, thereafter, the refund was paid to the appellant on 9-6-2011. Therefore, the amount deposited by the appellant under protest, which was not challenged, is liable to be returned to the appellant along with interest w.e.f. 29-9-2008. Accordingly, the appellant would be entitled for the benefit of interest prescribed under Section 27A of the Customs Act, 1962 for the period 29-9-2008 to 9-6-2011 and they hold accordingly. The decision relied upon by the appellant in the cases cited supra also supports the above view. The department is directed forthwith to pay interest due to the appellant for the period from 29-9-2008 to 9-6-2011.

Decision:- Appeal allowed.

Comment:- The crux of this case is that pre-deposit if ordered to be refunded must be returned within three months from the date of order passed by the appellate Tribunal or the Court unless there is a stay on the order by a superior Court and if the amount is not refunded within the period of three months, interest liability will arise on the same. One more analogy that is drawn from this case is that the principle of unjust enrichment is not applicable for refund of pre-deposit.

Prepared by: Kushal Shah

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com