TMI Blog2010 (12) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... hmd.) made by the Customs, Excise Service Tax Appellate Tribunal (the Tribunal), proposing the following questions : [1] Whether in the facts and the circumstances of the case, the learned Tribunal is justified in the eyes of law in holding that the interest cannot be claimed and recovered from the assessee under the Sugar Export Promotion Act, 1958? [2] Whether in the facts and the circumstances of the case, the learned Tribunal is justified in the eyes of law in holding that the decision in the context of the penalty, would mutatis mutandis apply in respect of the interest too? [3] Whether in the facts and the circumstances of the case, the learned Tribunal is justified in the eyes of law in holding that section 7(4) of the Sugar Export Promotion Act, 1958 does not confer the jurisdiction nor empower and authorize the Revenue to claim and recover the interest, under the Sugar Export Promotion Act, 1958, as is empowered and authorized under the Central Excise Act, 1944? [4] Whether in the facts and the circumstances of the case, the learned Tribunal is justified in the eyes of law in holding that the penal interest provisions of the Central Excise Act, 1944 have not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble ground regarding late payment of the principal amount. As such, the claim for interest cannot be equated with the imposition of penalty. It was contended that the Tribunal has committed an error of law in holding that the provisions regarding payment of interest in the Central Excise Act, 1944 are not included or made applicable to the Sugar Export Promotion Act, 1958. Referring to the provisions of sub-section (4) of Section 7 of the Act, it was submitted that the said provision is an inclusive provision and as such, levy of interest would stand included in the said provision. It was further contended that interest under Section 11AB of the Central Excise Act is a necessary concomitant of delayed payment of duty. Section 11AB of the Act is not a penal provision, but is a provision for collection of duty and therefore, the provisions of Section 11AB of the Act would apply with full force in respect of sugar and cess recoverable under the Sugar Export Promotion Act. 7. On the other hand, Mr. P. M. Dave, learned advocate appearing on behalf of the respondent invited attention to the provisions of Section 7 of the Act, to submit that the said section does not provide for payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole or any part of the duty payable by him within the period referred to in sub-section (2), he shall be liable to pay in respect of every period of thirty days or part thereof during which the default continues a penalty which may extend to ten per cent of the duty outstanding from time to time the penalty being adjudged in the same manner as the penalty to which person is liable under the rules made under Central Excise Act, 1944 (1 of 1944), is adjudged. (4) The provisions of the Central Excise Act, 1944 (1 of 1944) and the rules 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. 10. On a plain reading of the aforesaid provision, it is apparent that sub-section (1) thereof provides for levy of a duty of excise at the rate of rupees forty-five and fifty-five naye paise per quintal. Sub-section (2) thereof lays down that the duty of excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 is similarly worded to the provisions of sub-section (4) of Section 7 of the Sugar Export Promotion Act, 1958. The Supreme Court in the case of Collector of Central Excise, Ahmedabad v. Orient Fabrics (P) Ltd. (supra), in the context of the provisions of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 held that Section 3(3) of the said Act shows that breach of the provisions of the said 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 Act, 1944 and the Rules made thereunder. When the breach of the provisions of the Act is penal is nature or a penalty is imposed by way of additional tax, the constitutional mandate requires a clear authority of law for imposition of the same. The authority of law to levy or collect tax as postulated in Article 265 has to be specific and explicit and expressly provided. In the said case, the Supreme Court was dealing with the question as to whether penalty could be imposed where there was no specific pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssess, reassess, collect and enforce payment of the Central sales tax payable by a dealer as if it was payable under the State Act; this is the first part of Section 9(2). By the second part thereof, these authorities are empowered to exercise the powers they have under the State Act and the provisions of the State Act, including provisions relating to charging and payment of interest, apply accordingly. Having regard to what has been said in the case of Khemka Co. it must be held that the substantive law that the States sales tax authorities must apply is the Central Act. In such application, for procedural purposes alone, the provisions of the State Act are available. The provision relating to interest in the latter part of Section 9(2) can be employed by the States sales tax authorities only if the Central Act makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent. There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax the States sales tax authorities cannot, for the purpose of collecting and enforcing payment of Central sales tax, charge interest thereon. 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cess Act, 1966 as well as the Vegetable Oils Cess Act, 1983 for charging interest on delayed payment of cess. The Court, following the decisions of the Supreme Court in the cases of J.K. Synthetics Ltd. v. Commercial Taxes Officer, (supra) and India Carbon Ltd. and others v. State of Assam, (supra), has held thus : 9. A perusal of the provisions quoted above shows that when the 1966 Act was enacted by the Parliament, the Central Excise and Salt Act (now known as Central Excise Act, 1944) was in force. Therefore, instead of separately incorpo rating the provisions relating to levy and recovery of duty under the 1944 Act and the rules made thereunder, including those relating to the refund and exemption from duty, the provisions of the 1944 Act were made applicable for levy and collection of duties of excise on any produce specified in the Second Schedule to the 1966 Act. A similar provision was embodied in the 1983 Act in the form of Section 3(4). However, there is nothing in the language of Section 15(2) of the 1966 Act or Section 3(4) of the 1983 Act from which it can be inferred that it authorises the Central Government to charge interest on the delayed payment of cess. Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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