TMI Blog2017 (3) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay interest to the assessee because, by its nature, any such collection of money by Revenue can only be termed as exaction under ostensible authority of law - appeal allowed - decided in favor of assessee. - C.M.A. No. 3504 of 2010 - - - Dated:- 10-3-2017 - Rajiv Shakdher And R. Suresh Kumar, JJ. For Appellant : Mr.S.Murugappan For Respondents : M/s.R.Hemalatha for R-2 R-1 Tribunal JUDGMENT ( Judgment of the Court was delivered by Rajiv Shakdher, J.) 1.This is an appeal filed by the assessee which is directed against the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, (in short 'the Tribunal') dated 31st August, 2010. The appeal was admitted by our predecessor Bench when the following question of law was framed for consideration of this Court: ''Whether the Tribunal is correct in holding that the appellants are not entitled to interest on the differential duty paid by them during investigation when as per the law laid down by the Hon'ble Supreme Court in the case of Sandvik Asia Ltd. vs. Commissioner of Income Tax-I, Pune, reported in 2006 (196) ELT 257 (SC), interest is payable in suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f goods covered by BE No.55041, dated 09.11.1995, equivalent to 19.075 MTs, the assessee sought classification under heading 7204.49 of the Customs of Tariff Act, 1975 (in short 'CTA'). Consequently, assessment was made based on the BEs filed by the assessee. 3.4.The record, however, shows that the DRI, based on intelligence, conducted investigation into the matter. It is at the time of investigation that the assessee, admittedly, deposited a sum of ₹ 14,23,600/- with the customs authorities on 17.01.1996. 3.5.A Show Cause Notice (SCN) was, consequently, issued to the assessee which was adjudicated upon by the Commissioner, vide order dated 30.06.1997. The Commissioner, while passing the said order, issued the following operative directions: ''52. Under the above circumstances, I order the following:- 1.The goods should be considered as rolls for re-rolling mills, and not as heavy melting scrap. 2.The licence produced is not valid to cover the goods under import as admitted by them. 3.The goods shall be classified under Customs Tariff Heading 84.55.30 as rolls for re-rolling mills and charged to duty at the rate of 25% plus 15%. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed refund of the balance amount as well, i.e. a sum of ₹ 4,52,735/-. While directing the refund, the CCA rejected the prayer of the assessee for grant of interest. 4.2.The assessee was, thus, aggrieved by the fact that it had been denied interest both on the sum of ₹ 9,70,865/-, which was refunded to it on 01.04.2003 and, also, qua the sum of ₹ 4,52,735/- refunded to it pursuant to the order dated 31.12.2003 passed by the CCA. 4.3.The assessee proceeded to ventilate its grievance by preferring an appeal to the Tribunal. 4.4.The Tribunal, by virtue of the impugned order, dated 31.08.2010, partly, allowed the appeal of the assessee, inasmuch as it directed payment of interest on the sum of ₹ 4,52,735/-, while denying grant of interest on the sum of ₹ 9,70,865/-. The order of the Tribunal is brief, and therefore, the operative directions are culled out hereunder: ''2. I have heard both sides. I find that an amount of ₹ 9,70,865/- was paid as security while a further amount of ₹ 4,52,735/- was adjusted towards duty. Initially, only the security amount was refunded but vide the impugned order, the amount of duty adjusted has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of security deposit and therefore, as rightly held by the Tribunal, no interest would be payable to the assessee under Section 27A of the Act. In support of her submissions, the learned counsel relied upon the order of the CCA, dated 31.12.2003, wherein, an observation has been made to the effect that the assessee had stated in its grounds of appeal that the sum of ₹ 14,23,600/- was deposited as security and not as duty. 9.1.Furthermore, learned counsel relied upon the proviso to Section 27 (2) of the Act to emphasize the point that interest was payable only if duty had been determined in the matter. In addition, learned counsel also relied upon Section 27A of the Act to further stress upon the fact that only if ''duty'' is refunded, can interest be paid on the delayed refund of the same. 10.As indicated above, the result of the assessee's appeal before us, is dependent on the ascertainment of the nature of the deposit made by the assessee. 10.1.The facts narrated by us would show that the assessee had cleared four consignments. The first two consignments were cleared in March, 1995, while the remaining two were cleared in October / November, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003. 10.5.The argument of Mrs.Hemalatha that the interest on delayed refund can only be paid if the duty is determined, according to us, is clearly answered upon perusal of the CCA's order, dated 30.06.1997. In so far as argument based on Section 27 of the Act is concerned, according to us, it has no application because the said section is applicable when refund of duty or interest is sought. In the present case, the assessee is seeking interest on delayed payment of refund, and therefore, the circumstances obtaining in the present case can only be a subject matter of Section 27A of the Act. Since duty for past clearances was determined and adjusted, the assessee, to our minds, would be entitled to interest under Section 27A of the Act. 11.Before we conclude, we may also indicate that Mrs.Hemalatha had, while emphasizing of the point, advanced the argument that when DRI collected the amount, there was no assessment and that by itself would show that the amounts paid at that point in time by the assessee were voluntary in nature. According to us, this is an argument, which is, in a sense, self-destructive. To say that payments were made voluntarily when DRI officials des ..... 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