Custom, Excise & Service Tax Tribunal
M/S Finolex Cables Ltd vs Cce, Goa on 21 December, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/349/11 (Arising out of Order-in-Appeal No. GOA/CEX/GSK/127/2010 dated 09.12.2010 passed by the Commissioner of Central Excise, Customs & Service Tax (Appeals), Goa.) For approval and signature: Hon'ble Shri Raju, Member (Technical) =====================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ===================================================== M/s Finolex Cables Ltd. Appellant Vs. CCE, Goa Respondent Appearance: Shri Rajesh Ostwal, C.A. for Appellant Shri R.K. Maji, Asst. Commr. (A.R.) for Respondent CORAM: SHRI RAJU, MEMBER (TECHNICAL) Date of Hearing: 21.12.2015 Date of Decision: .2015 ORDER NO. Per: Raju:
The appellants M/s Finolex Cables Ltd. are seeking interest on the delayed payment of interest on the delay in sanction of refund.
2. Learned Counsel for the appellant argued that the interest on delayed payment of interest has to be sanctioned in view of the decision of Hon'ble Supreme Court in case of Sandvik Asia Ltd. Vs. CIT, Pune 2006(196)ELT 257(SC). He also relied on the decision of Hon'ble High Court of Gujarat in case of Shri Jagdamba Polymers Ltd. - 2013(289) ELT 429. Learned Counsel also relied on decisions of Tribunal in case of
(i) VBC Industries Ltd. Vs. CCE 2008 (225) ELT 472
(i) Kerala Chemicals & Proteins Ltd. Vs. CCE 2007 (211) ELT 375
3. Learned A.R. relied on the orders. He further relied on the decision of Larger Bench in case of Sun Pharmaceuticals Industries 2005 (185) ELT 253 (LB) where it has been held that interest on interest can not be sanctioned. He also relied on following discussions for this purpose.
(i) CCE, Surat Vs. Mahavir Crimpers 2013 (296) ELT 97
(i) VIRCHOW Laboratories Vs. CCE 2012 (280) ELT 133 He also relied on the decision of Hon'ble Supreme Court in case of VOI Vs. Kirloshar Pneumatic Company 1996 (84) ELT 401 (SC) to assert that the Hon'ble High Court in writ jurisdiction can not direct the authorities to act contrary to the Law.
4. I have gone through the rival submissions.
4.1 I find that the decision of Tribunal in case of Sun Pharmaceuticals Industries 2005 (185) ELT 253 (LB) relies on the decision of the Hon'ble High Court in case of Sandvik Asia Ltd. Vs. CIT, Pune 2004(267) ITR 78. The said decision of Hon'ble High Court in case of Sandvik Asia Ltd. was overturned by the Hon'ble Supreme Court. In that case, under Income Tax Act, the Hon'ble Supreme Court held that the assessees are entitled to interest on delayed payment of interest. Thus no reliance can be placed on the decision of Tribunal in case of Sun Pharmaceuticals Industries.
4.2 I find that there are decisions of Tribunal which allow the interest on delayed payment of interest and there are other which disallow the same. I find that Hon'ble High Court of Gujarat in its decision in case of Shri Jagdamba Polymers Ltd. -2013(289) ELT 429 (Guj.) has examined and followed the decision of the Hon'ble Supreme Court in case of Sandvik Asia (supra). The Hon'ble High Court has after examining the facts of the case observed as under-
22.?In sum and substance, in the facts of the present case, the Department cannot avoid the liability of accounting for interest on the delayed payment of interest to the extent the same was paid late. Since such claim does not fall within the statutory provisions contained in Section 11BB of the Act, in exercise of writ jurisdiction, we would not direct payment of such interest at the statutory rate but would provide for reasonable interest looking to the present trend. Under the circumstances, the petition is allowed. The respondents shall pay simple interest at the rate of 9% per annum on the sum of Rs.1,06,12,678/- for the period between 1-4-2003 to 23-9-2004 which shall be done within a period of eight weeks from the date of receipt of a copy of this order. The petition is disposed of accordingly. Rule made absolute. No costs.
5. It can be seen that Hon'ble High Court has invoked its extraordinary powers in writ jurisdiction to grant interest on delayed payment of interest. The Tribunal does not have any powers to go beyond the Act under which it has been created. The Tribunal has in case of Virchow Laboratories Ltd. has observed as under
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 v. 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 view of above I have reached a conclusion that Tribunal, in absence of any extraordinary powers like those of Hon'ble High Court and Hon'ble Supreme Court, can not go beyond the scope of the Act. Since there is no provision in the Act to allow the interest on delayed payment of interest the appeal is dismissed.
(Pronounced in Court on .) (Raju) Member (Technical) Sp 4 APPEAL NO. E/349/11