Custom, Excise & Service Tax Tribunal
M/S. Virchow Laboratories Ltd vs Cce&C, Hyderabad on 17 August, 2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing:17/08/2011
Date of decision:17/08/2011
Appeal No.E/1124/06; C/385/08
(Arising out of Order-in-Appeal No.38/2006(H-IV)CE dt. 31/10/2006 & No.04/2008(H-II) Cus. dt. 31/1/2008
passed by C,CE&ST(Appeals), Hyderabad)
For approval and signature:
Honble Mr. P.G. Chacko, Member(Judicial)
Honble Mr. M. Veeraiyan, Member(Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Virchow Laboratories Ltd.
..Appellant(s)
Vs.
CCE&C, Hyderabad
..Respondent(s)
Appearance Mr. M. Rajendran, Advocate for the appellant.
Mr. R.K. Singla, JCDR for the Revenue.
Coram:
Honble Mr. P.G. Chacko, Member(Judicial) Honble Mr. M. Veeraiyan, Member(Technical) FINAL ORDER No._______________________2011 Per P.G. Chacko These appeals were filed by the assessee claiming interest on interest.
2. The appellant (assessee) had deposited an amount of Rs.31,52,256/- with the Department on 31/1/1997 (under protest) towards interest for alleged violation of conditions of Notification No.203/92-Cus. dt. 19/5/1992, but they obtained refund of this amount from the Assistant Commissioner on 02/07/2006 on the strength of Final Order No.548/2006 dt. 9/3/2006 passed by this Tribunal. However, their claim for interest on the above amount for the delay of the refund was rejected by the Assistant Commissioner as per order dt. 30/6/2006. An appeal filed by the party against the order of the Assistant Commissioner was rejected by the Commissioner(Appeals). The first appeal before us is against the decision of the Commissioner(Appeals).
3. The assessee had obtained refund of Rs.15,88,798/- from the Assistant Commissioner on 02/07/2004, being the excess amount of anti-dumping duty collected from them by the Revenue. But the request for interest on the said amount under Section 27A of the Customs Act was turned down by the Assistant Commissioner and the latters order was upheld by the Commissioner(Appeals). The appellate Commissioners order came to be set aside by this Tribunal and, consequently, the assessee was paid the amount of Rs.3,27,858/- as interest by the Assistant Commissioner for the delay in granting the refund. Subsequently, claiming support from the Supreme Courts judgment in Sandvik Asia Ltd Vs. Commissioner of Income Tax-I [2006(196) ELT 257 (SC)], the assessee submitted a letter to the Assistant Commissioner claiming Rs.59,014/- as interest on the aforesaid amount of Rs.3,27,858/- for the period from 2/7/2004 to 30/6/2007 (the date on which the Assistant Commissioner paid the said amount of Rs.3,27,858/- as interest). This claim for interest on interest was rejected by the Assistant Commissioner and his order was upheld by the Commissioner(Appeals) in view of the Tribunals Larger Bench decision in Sun Pharmaceuticals Industries Ltd. Vs. Commissioner [2005(185) ELT 253 (Tri. LB)]. The second appeal before us is against the appellate Commissioners order.
4. Heard both sides. Ld. Counsel for the appellant reiterated the grounds of these appeals and claimed support from the following two orders of the Tribunal viz. VBC Industries Ltd. Vs. CC, Chennai [2005(192) ELT 275 (Tri. Bang.)] and VBC Industries Ltd. Vs. CCE & C, Visakhapatnam [2008(225) ELT 375 (Tri. Bang.)]. The ld. Counsel also argued that the Tribunals decision in Sun Pharmaceuticals case was not applicable.
5. Ld. JCDR submitted that there was no provision for payment of interest on interest under the Central Excise Act or under the Customs Act as held by the Tribunals Larger Bench in Sun Pharmaceuticals case and therefore both the appeals should be dismissed.
6. After considering the rival submissions, we are of the view that the issue agitated before us is already covered in favour of the Revenue by the Tribunals Larger Bench decision in Sun Pharmaceuticals case (supra) wherein it was held that interest on delayed payment of interest was not permissible under the Central Excise Act and/or the rules made thereunder. The Larger Bench found that there was no specific provision in the Act or the rules for payment of such interest. It therefore held that the Tribunal had no power to award such interest to any claimant. We also note that, in the case of Sun Pharmaceuticals Ltd., the Larger Bench had also considered and distinguished the case of Commissioner of Income Tax Vs. Narendra Doshi [254 ITR 606 (SC)] before taking the above view. Therefore the view taken by the Tribunals Division Bench relying on the apex courts judgment in Narendra Doshis case cannot be considered as a precedent. The apex courts decision in the case of Sandvik Asia Ltd. (supra) is also not applicable to the instant case inasmuch as, in that case also, the court was dealing with certain issues arising under the Income Tax Act. The question to be decided by us is whether this Tribunal has power to award interest on delayed payment of interest to the assessee. The Tribunals Larger Bench has already settled this issue by holding that this Tribunal has no such power for want of specific provision in the Central Excise Act/Rules for payment of interest on delayed payment of interest. The Larger Bench decision is equally applicable to a claim for interest on delayed payment of interest on Customs duty in the absence of specific provisions in the Customs Act and the rules made thereunder. The Larger Bench decision is binding on this Bench.
7. In the result, both the appeals are dismissed.
(Operative portion of this order pronounced on conclusion of the hearing) (M. VEERAIYAN) MEMBER (TECHNICAL) ( P.G. CHACKO ) MEMBER (JUDICIAL) Nr 5