9911796707
TMI Blog2024 (9) TMI 1356X X X X Extracts X X X X X X X X Extracts X X X X ..... since the issue involved is common. However, in the present order, facts relating to Writ Petition No. 12299 of 2024 are narrated for sake of convenience. 3. By this petition under Article 226 of the Constitution of India, Petitioner is seeking for quashing of Order-in-Original (O-I-O) dated 5th July 2024 whereby Respondents have granted interest @ 6% per annum on the amount refunded to Petitioner by rejecting the claim of Petitioner to grant interest @18% per annum. Brief undisputed and admitted facts are as under: 4. On 29th August 2011, an investigation was initiated by Respondent No. 4 against one Perfect Containers Pvt. Ltd. In the course of the investigation, Petitioner's residence premises were searched and a sum of Rs. 2,06,33,000/- was seized on the allegation that same constitutes unaccounted receipts arising out of sales made by Perfect Containers Pvt. Ltd. In the course of said investigation Rs. 15,94,000/- was also seized from the residence of Petitioner's son. The aggregate cash seized was Rs. 2,22,27,008/-. The seized amount was deposited by Respondent No. 4 in fixed deposit with Punjab & Sind Bank. 5. On 19th May 2016, O-I-O was passed against Perfect Container ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laneous Application, impugned O-I-O dated 5th July 2024 came to be passed ordering return of seized cash of Rs. 2,06,33,000/- along with interest @6% from the date of fixed deposit, i.e. 30th August 2011 till the date of refund. The rate of 6% interest was granted on the basis of Circular No. 984/08/2014 dated 16th September 2014 and the relevant extract of the said Circular reproduced in the impugned O-I-O states that in case appeal is decided in favour of assessee he shall be entitled to refund of amount deposited @6% per annum from the date of making the deposit to the date of refund in terms of section 35FF of the Central Excise Act, 1944 or section 129EE of the Customs Act. Petitioner, thereafter, filed a letter dated 29th July 2024 with the Tribunal informing that Respondents have granted refund along with interest @6% and therefore do not wish to pursue the Miscellaneous Application. However, in the said letter it was stated that Petitioner is aggrieved by rate of 6% per annum and will pursue the remedies available in law for redressal of the same. The interest worked out by Respondents @6% per annum from the date of fixed deposit till the grant of refund was Rs. 1,59,83,313 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Excise & Customs) New Delhi, dated the 16th September, 2014 To, 1. All Chief Commissioners, Central Excise and Service Tax/ Customs. 2. All Commissioners of Central Excise, Service Tax/ Customs. 3. Chief Commissioner (AR), CESTAT, New Delhi. 5. All Commissioners of Central Excise, Service Tax and Customs 6. All Commissioners (AR), New Delhi, Mumbai, Chennai, Kolkata, Bangalore & Ahmadabad 7. Webmaster Sub: Amendments to the Appeal provisions in Customs, Central Excise and Service Tax made by Finance Act, 2014- Issue of clarifications - reg. Sir / Madam, The Finance Act (No. 2), 2014 has been enacted on 06.08.2014. Section 35F of the Central Excise Act, 1944 and Section 129E of the Customs Act, 1962 have been substituted with new sections to prescribe mandatory pre-deposit as a percentage of the duty demanded where duty demanded is in dispute or where duty demanded and penalty levied are in dispute. Where penalty alone is in dispute, the pre-deposit shall be calculated on the penalty imposed. 1.2 The amended provisions apply to appeals filed after 6th August, 2014. Sections 35F of the Central Excise Act, 1944 and Section 129E of the Customs Act, 1962 conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment made during investigation: 3.1 Payment made during the course of investigation or audit, prior to the date on which appeal is filed, to the extent of 7.5% or 10%, subject to the limit of Rs. 10 crores, can be considered to be deposit made towards fulfillment of stipulation under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962. Any shortfall from the amount stipulated under these sections shall have to be paid before filing of appeal before the appellate authority. As a corollary, amounts paid over and above the amounts stipulated under Section 35 F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962, shall not be treated as deposit under the said sections. 3.2 Since the amount paid during investigation/audit takes the colour of deposit under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962 only when the appeal is filed, the date of filing of appeal shall be deemed to be the date of deposit made in terms of the said sections. 3.3 In case of any short-payment or non-payment of the amount stipulated under Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days of the receipt of the letter of the appellant seeking refund, irrespective of whether order of the appellate authority is proposed to be challenged by the Department or not. 5.3 If the Department contemplates appeal against the order of the Commissioner (A) or the order of CESTAT, which is in favour of the appellant, refund along with interest would still be payable unless such order is stayed by a competent Appellate Authority. 5.4 In the event of a remand, refund of the pre-deposit shall be payable along with interest. 5.5 In case of partial remand where a portion of the duty is confirmed, it may be ensured that the duty due to the Government on the portion of order in favour of the revenue is collected by adjusting the deposited amount along with interest. 5.6. It is reiterated that refund of pre-deposit made should not be withheld on the ground that Department is proposing to file an appeal or has filed an appeal against the order granting relief to the party. Jurisdictional Commissioner should ensure that refund of deposit made for hearing the appeal should be paid within the stipulated time of 15 days as per para 5.2 supra. 6. Procedure and Manner of making the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed to incorporate the following sentence in the Preamble to the order being issued by them - "An appeal against this order shall lie before the Commissioner (Appeal) on payment of 7.5% of the duty demanded where duty or duty and penalty are in dispute or penalty, are in dispute or penalty, where penalty alone is in dispute." 8.2 The following may be added in the preamble of the orders issued by the Commissioner (Appeals) - "An appeal against this order shall lie before the Tribunal on payment of 10% of the duty demanded where duty or duty and penalty are in dispute, or penalty, where penalty alone is in dispute". 8.3 The following may be added in the preamble of the orders issued by the Commissioner as original adjudicating authority - "An appeal against this order shall lie before the Tribunal on payment of 7.5% of the duty demanded where duty or duty and penalty are in dispute, or penalty, where penalty alone is in dispute". 9. Receipt of the Circular may please be acknowledged. 10. Hindi version follows. (Sunil K. Sinha ) Director (Judicial Cell) 16. In our view, the aforesaid Circular is not applicable to the case of Petitioner since, admittedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust by Respondents till the determination of final liability, if any, and it is only after the said finalization and appropriation that the sum can be said to be belonging to Respondents as recovery of tax dues. Till the point of finalisation of tax dues Respondents continued to hold the cash seized in trust for and on behalf of Petitioner. In the present case it is undisputed that at no point of time the cash seized was appropriated towards final tax dues and rightly so because the order discharging Petitioner of tax dues had attained finality. It is settled position that a trustee cannot enrich himself on behalf of the person for whom the money is held in trust. A trustee is supposed to account for each and every sum of money which is held in trust on behalf of the beneficiary. In the instant case, therefore, action of Respondents in granting interest @6% per annum when the fixed deposits arising out of cash seized from Petitioner have earned more than 6% per annum cannot be justified and Respondents are duty bound to handover the entire amount of interest which they have earned. 20. In our view, attempt of Respondents to retain interest earned at the rate of more than 6% and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust 2024, sum of Rs. 97,03,728/- is due and payable by Respondents to Petitioner and his son. Since the said working has not been disputed by Respondents, the alternative prayer made by Petitioner for grant of interest actually earned and after factoring the discrepancies which Respondents have neglected, in our view Petitioner is entitled to sum of Rs. 90,07,829/-. The balance sum of Rs. 6,95,899/- is attributable to cash seized from Petitioner's son. The aggregate of the said two sums is Rs. 97,03,728/-. 22. Respondents have made a fixed deposit of Rs. 50,63,062/- on 14th August 2024 for a period of one year. In our view, there is no justification for making the said fixed deposit and, therefore, Respondents should foreclose the said fixed deposit and pay over the amount alongwith interest to Petitioner. 23. We may observe that if the aforesaid two amounts are not returned within a period of four weeks from the date of uploading the order then Respondents would be liable to pay interest @6% per annum on the said two amounts till the actual date of refund. The rate of 6% is not based on the Circular No. 984 of 2014 but we have arrived at this rate based on the fixed deposit made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 14th August 2024 amounting Rs. 50,63,062/- and return the same to Petitioner's account alongwith interest actually received on the said fixed deposit from Punjab and Sind Bank. The said amount should be returned within a period of four weeks from the date of uploading the present order. If the same is not returned within the aforesaid period of four weeks then Petitioner would be entitled to interest @6% per annum from the date of expiry of four weeks till the date of actual refund. (v) Concerned Commissioner GST and CX is directed to initiate inquiry and fix the accountability and responsibility for non-renewal of fixed deposits after the expiry of 10 years and take appropriate action against the persons who are involved in the said negligence including recovery of the interest from the salary/retirement benefits of the person found responsible. 26. Writ Petition No. 12299 of 2024 disposed. 27. Rule is made absolute in above terms. WRIT PETITION (STAMP) NO. 26523 of 2024 :- ORDER (i) Impugned O-I-O dated 5th July 2024, Exhibit A to the petition is quashed and set aside. (ii) Petitioner is not entitled to interest @18% per annum. However, is entitled to sum of Rs. 6,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
