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Sony Pictures Networks India Pvt. Ltd. Versus the Union of India, The Commissioner of Customs and Central Excise, the Assistant Commissioner of Customs, Thiruvananthapuram

2017 (5) TMI 864 - KERALA HIGH COURT

Entitlement to interest - relevant date for calculation of interest - refund of pre-deposit - whether the petitioner is entitled to get interest at the rate of 12% per annum on refund of pre-deposit of ₹ 1,15,15,214/- granted to the petitioner after the expiry of three months from the date of the order passed by the appellate Tribunal that is 18.11.2002 till the date of actual refund along with further interest on the delayed payment of interest? - Held that: - the petitioner is entitled t .....

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nt of time, especially due to the fact that the notifications are not restricting the payment of interest from the date of submission of application. - What will be the rate of interest that the petitioner is entitled to get? - Held that: - in the case of Kuil Fire Works Industries v. Collector of Central of Excise [1997 (9) TMI 105 - SUPREME COURT OF INDIA], it was held that, the pre-deposit made by the assessee was directed to be returned to him with 12% interest - the interest that is lia .....

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4/- granted to the petitioner after the expiry of three months from the date of the order passed by the appellate Tribunal that is 18.11.2002 till the date of actual refund along with further interest on the delayed payment of interest. 2. Brief facts required for the disposal of the writ petition are as follows:- Petitioner is a private limited company incorporated under the Companies Act, 1956. During the period June 2000 to February 2001 petitioner imported 4500 numbers of satellite receivers .....

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l duty for the sum of ₹ 5,07,09,527/- as per the classification under heading 85.28 of the Customs Tariff, due to which petitioner paid the duty liability of ₹ 3,81,16,852/-. The Deputy Commissioner confirmed the demand of differential duty and being aggrieved, petitioner preferred an appeal before the Commissioner(Appeals). During the pendency of the Appeal as per provisions of Section 129E of the Act, petitioner paid an amount of ₹ 1,15,15,214/- under protest in respect of th .....

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it. According to the petitioner, it has submitted Ext.P6 application dated 01.10.2015 seeking refund of the amount of ₹ 1,15,15,214/-. Thereupon 3rd respondent as per Exts.P7 & P8 letter dated 28.10.2015 and 28.12.2015 directed the petitioner to produce various documents to process the application. In response petitioner filed Ext.P9 reply in detail and submitted documents to the extent available. Third respondent, on claiming of the refund of duty, paid under protest, issued show cau .....

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o the petitioner within one month from the date of the order. Accordingly petitioner received the refund cheque for ₹ 1,15,15,214, along with a cheque towards interest for an amount of ₹ 5,69,766/- and a letter stating that, as per para 4 of CBEC circular No.802/35/2004-CX dated 08.12.2004, pre-deposit has to be returned within 3 months from the date of receipt of the final order of the court, and the order of the Supreme Court in the present case, which was received at the office of .....

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ought from the Commissioner of Central Excise and Customs, Thiruvananthapuram. In the interim, cheque issued towards interest was dishonoured and on intimation a fresh cheque was issued for the said amounts, which also had some complication initially, however sorted out and cheque was honoured. But in spite of all these efforts there was no response and as a last attempt, Ext.P23 lawyer notice was issued. To the said notice Ext.P24 letter was issued by 3rd respondent stating that appropriate int .....

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it virtually admitting the facts and circumstances narrated above in respect of the proceedings that took place. Apart from the same it is contented that respondents admitted the receipt of the advocates letter dated 16.11.2016. However, respondent in a way has become functus officio on matters relating to payment of any further interest and the refund amount along with interest has already been sanctioned to the petitioner as per the order of this Court stipulated in Circular No.275/37/2K-CX.8A .....

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onths from the date of receipt of the order of the court, the Honourable Supreme Court in the instant case. The order of the Supreme Court settling the classification dispute in the instant case was received at the office of the Central Board of Excise and customs on 04.08.2015. Hence the petitioner become eligible for interest from 04.11.2015 and accordingly applicable interest was paid to the petitioner as per the notification dated 12.09.2003. It is further contented that the Supreme Court by .....

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under protest. It is also stated that petitioner submitted a letter asking for the refund of differential duty paid for the first time only as per the letter referred to above. No such course of action was adopted by the petitioner after the order passed by the cegat dated 18.11.2002. The circular dated 02.01.2002 of CBEC regarding return of deposits made under Section 35 of Central Excise Act, 1944 and Section 129E of Customs Act, 1962, stipulates that a simple letter from a person who has made .....

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no officer could have granted refund suo motu due to (1) Petitioner himself calling the impugned payment as differential duty and (2) Petitioner is not submitting a letter for return or refund of the amount. Therefore according to the respondents any such payment by the then Assistant Commissioner could have been violation of the circular dated 02.01.2002. That apart it is stated that after the judgment of the Supreme Court on 28.7.2015, department requested for certain documents from the petiti .....

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quired documents for processing the claim and verifying the unjust enrichment part. That apart it is stated that as per Ext.P12 judgment of this Court and on receipt of the indemnity bond on 01.09.2016 the pre-deposit of ₹ 1,15,15,214/- made by the petitioner was returned along with applicable interest on the same date itself, calculating the interest on the basis of the circular dated 02.01.2002. Therefore, according to the respondents everything was done in accordance with law and there .....

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ed to in the circular where the rate of interest quantified as 12% per annum is to be applied in the instant case cannot be accepted as the facts of the said case are entirely different from this case. As per notification No.75/2003/ Customs/NT dated 12.09.2003 the Central Government has fixed the rate of interest at 6% per annum for the purpose of the said section. Therefore, according to the respondents, petitioner is not entitled to get any relief as sought for in the writ petition. 9. A repl .....

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art it is also stated that 3rd respondent was duty bound to implement Ext.P12 judgment of this Court fully and correctly. Other contentions are also raised controverting the statement contained in the counter affidavit filed by respondents 2 and 3 and basing the claim on the principles of law laid down by various courts. 10. Heard learned counsel for the petitioner and learned Standing Counsel appearing for the respondents 2 and 3 and perused the documents on record and pleadings put forth by th .....

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ed by the petitioner, petitioner is entitled to get interest at the rate of 12% from 18.11.2002 as held by the Apex Court in Commissioner of Central Excise (cited supra). On the other hand the contentions advanced by learned Standing Counsel for respondents 2 and 3 is that, the authority has received the order of the Supreme Court only on 04.08.2015 and therefore the authority is liable to pay interest to the petitioner on the expiry of three months from the said date. It is an admitted fact tha .....

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is regard. The relevant portion of the notification dated 02.01.2002 read thus:- ''Subject : Return of deposits made in terms of Section 35F of the Central Excise Act, 1944 and Section 129E of Customs Act, 1962 - Reg. The issue relating to refund of pre-deposit made during the pendency of appeal was discussed in the Board meeting. It was decided that since the practice in the Department had all along been to consider such deposits as other than duty, such deposits should be returned in t .....

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tion in the event of an appellant finally succeeding in the appeal, and, (ii) the refunds so claimed are covered under the provisions of Section 11B of the Act and are governed by the parameters applicable to the claim of refund of duty as the amount is deposited under Section 35F of the Central Excise Act, 944. The Hon'ble Supreme Court vide its order dated 26.11.2001 dismissed the appeal. Even though the Apex Court did not spell out the reasons for dismissal, it can well be construed in th .....

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ox copy of the orderin appeal or CEGAT order consequent to which the deposit made becomes returnable and an attested Xerox copy of the challan in Form TR6 evidencing the payment of the amount of such deposit, addressed to the concerned Assistant/Deputy Commissioner of Central Excise or Customs, as the case may be, will suffice for the purpose. All pending refund applications already made under the relevant provisions of the Indirect Tax Enactments for return of such deposits and which are pendin .....

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terate the earlier Circulars on the subject of non-implementation of orders of CESTAT or any Final Authority in relation to returning pre-deposits made as per directions of CEATAT or any other Final Authority in terms of Section 35F of the Central Excise Act, 1944 & Section 129E of the Customs Act, 1962. The board has taken a strict view with regard to non-returning of such deposits. 2. As we are all aware the CESTAT has in a number of such cases awarded interest on predeposits where it orde .....

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f the pre-deposits are reiterated. It is again reiterated that in terms of Hon'ble Supreme Court's order such pre-deposit must be returned within 3 months from the date of the order passed by the Appellate Tribunal/Court or other Final Authority unless there is a stay on the order of the Final Authority/CESTAT/Court, by a superior Court. 5. Delay beyond this period of three months in such cases will be viewed adversely and appropriate disciplinary action will be initiated against the con .....

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be endorsed to this office for information. Therefore on an appreciation of the notifications, it is unequivocally clear that the petitioner is entitled to get refund of the amount within a period of three months of the disposal of the appeals in the assessee's favour. Here the assessee has secured an order from the appellate Tribunal on 18.11.2002 and the refund was pending from the said date. However, in this regard learned counsel for the respondents submitted that, petitioner has made t .....

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petitioner ie. the date of the order of the Appellate Tribunal, even if the application was submitted at a later point of time, especially due to the fact that the notifications are not restricting the payment of interest from the date of submission of application. 14. Now, the sole question remains to be considered is what is the nature of interest that the petitioner is entitled to get. As discussed above in the judgment Commissioner of Central Excise v. ITC (supra), the Apex Court confined th .....

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