Custom, Excise & Service Tax Tribunal
Nidhi Auto Pvt Ltd vs Ce & Cgst Noida on 28 May, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Excise Appeal No.70301 of 2020
(Arising out of Order-in-Appeal No.NOI-EXCUS-001-APP-110-20-21 dated
27/05/2020 passed by Commissioner (Appeals) Central Goods & Services
Tax, Noida)
M/s Nidhi Auto Pvt. Ltd., .....Appellant
(C-43, Phase-II, Noida-201305)
VERSUS
Commissioner of Central Excise &
Service Tax, Noida ....Respondent
(C-56/42, Sector-62, Noida-201309)
WITH
Excise Appeal No.70689 of 2021
(Arising out of Order-in-Appeal No.NOI-EXCUS-001-APP-655-656-21-22 dated
15/09/2021 passed by Commissioner (Appeals) Central Goods & Services
Tax, Noida)
M/s Nidhi Auto Pvt. Ltd., .....Appellant
(C-43, Phase-II, Noida-201305)
VERSUS
Commissioner of Central Excise &
Service Tax, Noida ....Respondent
(C-56/42, Sector-62, Noida-201309)
APPEARANCE:
Shri Abhishek Jaju, Advocate &
Shri R.S. Yadav, Advocate for the Appellant
Shri Sandeep Pandey, Authorised Representative for the Respondent
CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
FINAL ORDER NOs.70270-70271/2024
DATE OF HEARING : 27 March, 2024
DATE OF PRONOUNCEMENT : 28 May, 2024
SANJIV SRIVASTAVA:
Excise Appeal No.70301 of 2020 is directed against Order-
in-Appeal No.NOI-EXCUS-001-APP-110-20-21 dated 27/05/2020
2 Excise Appeal Nos.70301 of 2020 &
70689 of 2021
& Excise Appeal No.70689 of 2021 is directed against Order-in-
Appeal No.NOI-EXCUS-001-APP-655-656-21-22 dated
15/09/2021 both passed by Commissioner (Appeals) Central
Goods & Services Tax, Noida. By the impugned order dated
27.05.2020 Commissioner (Appeals) has held as follows:-
"6.7 I find that the adjudicating authority has erred in
making payment of interest on total amount of deposit of
Rs 1.52 crores instead of pre-deposit of Rs 34,97,826/-
under Section 35F of the Act from the date of deposit
against the date of filing of appeal before the appellate
authority.
6.8. For the reasons discussed above, I find merit in the
appeal filed by the department appellant and allow the
same and in consequence, the impugned order is modified
to the above extent."
2.1 Investigations were undertaken against the appellant and
during the course of investigations deposit of Rs.1.52 crores
were made. After completion of the investigation a show cause
notice dated 04.01.2016 was issued to the appellant.
2.2 This show cause notice was adjudicated by the Principle
Commissioner, Central Excise, Noida vide Order-in-Original
No.27-Pr.Commr./Noida-I/2016-17 dated 22.12.2016 confirming
the demand of Rs.4,66,37,681/- with equal penalty and interest
on demand. Penalties on Director and suppliers also imposed.
Aggrieved appellant has filed appeal before this Tribunal and the
Tribunal vide Final Order No.71086-71091/2019 dated
18.06.2019 allowed the appeal of the appellant with
consequential relief.
2.3 After the decision of the Tribunal, appellant filed
application for refund of Rs.1.52 crores alongwith interest in
terms of said order of the Tribunal on 23.08.2019. Assistant
Commissioner, Central Excise, Noida by the Order-in-Original
No.11-R/AC/N-V/2019 dated 02.09.2019 allowed the refund
application by holding as follows:-
3 Excise Appeal Nos.70301 of 2020 &
70689 of 2021
ORDER
I hereby sanction refund claim of pre-deposit along with interest total amounting to Rs.1,93,06,815/- (Rs. One crore Ninety three lacs Six thousand Eight Hundred fifteen Only) under Section 35F of the Central Excise Act, 1944 as applicable to Service Tax under Section 83 of Finance Act, 1994 in respect of the pre deposit made by the party.
Accordingly. E-payment advice to Bank for credit of Rs. 1,93,06,815/- (Rs. One crore Ninety three lacs Six thousand Eight Hundred fifteen Only) directly into the party's bank account as per their request through RTGS/NEFT facility is being sent.
Account No. Name of Address of IFSC Code MICR
the Bank the Bank
558044009853 Kotak Sector-18, KKBK0005033 -
Mahindra Noida, U.P.
Bank Ltd. 201301
2.4 Aggrieved by the said order, revenue filed an appeal before Commissioner (Appeals) for modifying the order of Assistant Commissioner, to the extent of grant of erroneous refund of Rs.35,95,653/- on the ground that the interest was payable only from the date of filing appeal before the Tribunal and not form of date of deposit for Rs.1.52 crores by referring to circular No.984/08/2014-CX dated 16.09.2014. 2.6 Commissioner (Appeals) has allowed the appeal filed by the revenue.
2.7 Aggrieved Appellant has filed Excise Appeal No.70301 of 2020 before this Tribunal.
2.8 Pursuant to the order of Commissioner (Appeals), revenue has issued a show cause notice dated 09.12.2019 to the appellant asking them to show cause as to why- i. Excess/erroneous Interest amount of Rs. 35,95,653/-
sanctioned and paid to them, should not be demanded from them under Section11A(1) read with section 11A(15) of Central Excise Act, 1944.
4 Excise Appeal Nos.70301 of 2020 &70689 of 2021 ii. Interest should not be demanded from them under Section11AA of Central Excise Act, 1944.
iii. Penalty under Section 11AC of Central Excise Act, 1944should not be imposed upon them.
iv. Sri Kuldeep Singh Parmar, Director of M/s Nidhi Auto Pvt.
Ltd., C-43, Phase-II, Noida is also required to show cause to the Assistant Commissioner, Central Goods & Services Tax, Division-V, Noida as to why penalty under Rule 26 of Central Excise Rules, 2002 of the Central Excise Rules, 2002 should not be imposed upon them."
2.9 This show cause notice was adjudicated as per the Order- in-Original No.07/AC/DIV-V/N/2020-21 dated 12.02.2021 by holding as follows:-
ORDER
(i) I confirm the demand of excess/erroneous interest amount of Rs. 35,95,653/-(Rupees Thirty Five Lakhs Ninety Five Thousand and Six hundred Fifty Three only) sanctioned and paid to the party M/s Nidhi Auto Pvt. Ltd., C-43, Phase-II, Noida and order the same to be recovered from them under Section11A(1) read with section 11A(15) of Central Excise Act, 1944.
(ii) I order for recovery of interest on the aforesaid outstanding amount of Rs. 35,95.653/- at the appropriate rate as applicable from time to time from M/s Nidhi Auto Pvt. Ltd., C-43, Phase-II, Noida under Section 11AA of Central Excise Act, 1944.
(iii) I impose penalty of Rs.35,95,653/- only upon M/s Nidhi Auto Pvt. Ltd, C-43, Phase II, Noida under Section 11 AC of Central Excise Act, 1944.
(iv) I impose penalty of Rs.35,95,653/- only upon Sri Kuldeep Singh Parmar, Director of M/s Nidhi Auto Pvt. Ltd, C-43, Phase-II, Noida under Rule 26 of Central Excise Rules, 2002."5 Excise Appeal Nos.70301 of 2020 &
70689 of 2021 2.10 Aggrieved appellant filed appeal before Commissioner (Appeals), who by the impugned order have held as under:-
"19. In view of the foregoing, I hereby uphold the OIO No. 07/AC/DIV- V/N/2020-21 dated 12.2.2021 issued by Assistant Commissioner, Central GST, Division-V, Noida as far as demand of excess/erroneous interest amounting to Rs.35,95,653/- along with interest is concerned. However, penalty imposed on M/s Nidhi Auto Pvt. Ltd., Plot No. C- 43, Phase-II, Noida- 201305 and on Shri Kuldeep Singh Parmar are hereby set aside."
2.11 Aggrieved appellant have filed Excise Appeal No.70689 of 2021 before the Tribunal.
2.9 Since the issues in both the appeals are common, therefore, they are taken together for disposal. 3.1 I have heard Shri Abhishek Jaju and Shri R.S. Yadav Advocates for the appellant and Shri Sandeep Pandey Authorised Representative for the revenue.
3.2 Learned Counsel for the appellant submits that the issue involved in the present case is covered by the various decisions of this Tribunal and decisions of Hon'ble High Courts. Some of the decisions are reproduced as under:-
Ghaziabad ship Breakers Pvt. Ltd. Vs CCE, Jamnagar-2010 (260) ELT 274 (Tri.-Ahmd);
Ebiz.com Pvt. Ltd. Vs Commissioner of Central Excise, Customs & S.T.-2017 (49) STR 389 (All);
eBiz.com Pvt. Ltd. Vs UOI-2016 (44) STR 526 (Del.); M/s Green Valley Industries Ltd. Vs CGST & CX, Shillong Final Order No.75189/2022 dated 11.04.2022; Parle Agro Pvt. Ltd. Vs Commissioner, CGST, Noida-2022 (380) ELT 219 (Tri.-All.);
Commissioner of Central Goods & Service Tax, Ghaziabad Vs M/s Gulshan Rai Jain-II Final Order No.70146 of 2024 dated 18.03.2024.
3.3 Learned Authorized Representative reiterates the findings recorded in the orders of the lower authorities.
6 Excise Appeal Nos.70301 of 2020 &70689 of 2021 4.1 I have considered the impugned orders along with the submissions made in appeal and during the course of argument.
4.2 The short issue for consideration is what should be the relevant date for determination of interest in respect of deposits made during the investigation.
4.3 Appellant have relied upon various decisions of this Tribunal to argue that the refund should have been paid as per order by sustaining the order dated 02.09.2019 from the date of deposit whereas on the entire amount deposited during the investigation or the interest should have been paid on the amount of pre-deposit determined as per Section 35F from the date of filing of appeal and remaining amount from three months after the date of decision of the Tribunal. 4.4 Relevant provisions are reproduced below:-
Section 35F of Central Excise Act, 1944- 35F. Deposit of certain percentage of duty demanded or penalty imposed before filing appeal.-- The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal--
(i) under sub-section (1) of Section 35, unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of Central Excise lower in rank than the 2 [Principal Commissioner of Central Excise or Commissioner of Central Excise];
(ii) against the decision or order referred to in clause
(a) of sub-section (1) of Section 35-B, unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against;7 Excise Appeal Nos.70301 of 2020 &
70689 of 2021
(iii) against the decision or order referred to in clause
(b) of sub-section (1) of Section 35-B, unless the appellant has deposited ten per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against:
Provided that the amount required to be deposited under this section shall not exceed Rupees Ten crores:
Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No. 2) Act, 2014.
Explanation.--For the purposes of this section "duty demanded" shall include,--
(i) amount determined under Section 11D;
(ii) amount of erroneous CENVAT credit
taken;
(iii) amount payable under Rule 6 of the
CENVAT Credit Rules, 2001 or the
CENVAT Credit Rules, 2002 or the
CENVAT Credit Rules, 2004.]
Section 35FF of Central Excise Act, 1944-
35FF. Interest on delayed refund of amount deposited under Section 35F.--
Where an amount deposited by the appellant under Section 35F is required to be refunded consequent upon the order of the appellate authority, there shall be paid to the appellant interest at such rate, not below five per cent and not exceeding thirty-six per cent per annum as is for the time being fixed by the Central Government, by notification in the Official Gazette, on such amount from the date of payment of the amount till, the date of refund of such amount:
8 Excise Appeal Nos.70301 of 2020 &70689 of 2021 Provided that the amount deposited under Section 35F, prior to the commencement of the Finance (No. 2) Act, 2014, shall continue to be governed by the provisions of Section 35FF as it stood before the commencement of the said Act.]"
Section 11B of Central Excise Act, 1944- 11B. Claim for refund of 2 [duty and interest, if any, paid on such duty].--
(1) Any person claiming refund of any 3 [duty of excise and interest, if any, paid on such duty] may make an application for refund of such 2 [duty and interest, if any, paid on such duty] to the Assistant 4 [Principal Commissioner of Central Excise or Commissioner of Central Excise] 1 [or Deputy 2 [Principal Commissioner of Central Excise or Commissioner of Central Excise]] before the expiry of 3 [two years] 4 [from the relevant date] 5 [in such form 6 [and manner]] as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in Section 12-A) as the applicant may furnish to establish that the amount of 7 [duty of excise and interest, if any, paid on such duty] in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such 8 [duty and interest, if any, paid on such duty] had not been passed on by him to any other person:
Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) as substituted by that Act:] 9 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 Provided further that the limitation of one year shall not apply where any [duty and interest, if any, paid on such duty] has been paid under protest. (2) If, on receipt of any such application, the Assistant 2 [Principal Commissioner of Central Excise or Commissioner of Central Excise] 1 [or Deputy 2 [Principal Commissioner of Central Excise or Commissioner of Central Excise]] is satisfied that the whole or any part of the [duty of excise and interest, if any, paid on such duty] paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund:
Provided that the amount of [duty of excise and interest, if any, paid on such duty] as determined by the Assistant [Principal Commissioner of Central Excise or Commissioner of Central Excise] [or Deputy [Principal Commissioner of Central Excise or Commissioner of Central Excise]] under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to--
(a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;
(b) unspent advance deposits lying in balance in the applicant's account current maintained with the [Principal Commissioner of Central Excise or Commissioner of Central Excise];
(c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act;
(d) the [duty of excise and interest, if any paid on such duty] paid by the manufacturer, if he had not 10 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 passed on the incidence of such [duty and interest, if any, paid on such duty] to any other person;
(e) the [duty of excise and interest, if any paid on such duty] borne by the buyer, if he had not passed on the incidence of such [duty and interest, if any, paid on such duty] to any other person;
(f) the [duty of excise and interest, if any paid on such duty] borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify: Provided further that no notification under clause
(f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of [duty and interest, if any, paid on such duty] has not been passed on by the persons concerned to any other person.
(3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2).
(4) Every notification under clause (f) of the first proviso to sub-section (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven days of its reassembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such 11 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder.
(5) For the removal of doubts, it is hereby declared that any notification issued under clause (f) of the first proviso to sub-section (2), including any such notification approved or modified under sub-section (4), may be rescinded by the Central Government at any time by notification in the Official Gazette.] [Explanation.-- For the purposes of this section,-- (A) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;
(B) "relevant date" means,--
(a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods,--
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or
(ii) if the goods are exported by land, the date on which such goods pass the frontier, or
(iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India;
(b) in the case of goods returned for being remade, refined, reconditioned, or subjected to any other similar process, in any factory, the date of entry into the factory for the purposes aforesaid;
(c) in the case of goods to which banderols are required to be affixed if removed for home consumption but not so required when exported outside India, if returned to a factory after having 12 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 been removed from such factory for export out of India, the date of entry into the factory;
(d) in a case where a manufacturer is required to pay a sum, for a certain period, on the basis of the rate fixed by the Central Government by notification in the Official Gazette in full discharge of his liability for the duty leviable on his production of certain goods, if after the manufacturer has made the payment on the basis of such rate for any period but before the expiry of that period such rate is reduced, the date of such reduction;
(e) in the case of a person, other than the manufacturer, the date of purchase of the goods by such person;] (ea) in the case of goods which are exempt from payment of duty by a special order issued under sub-
section (2) of Section 5-A, the date of issue of such order;] (eb) in case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof;] (ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction;]
(f) in any other case, the date of payment of duty.] Section 11BB of Central Excise Act, 1944- 11-BB. Interest on delayed refunds.--
If any duty ordered to be refunded under sub-section (2) of Section 11-B to any applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, 2 [not below five per cent and not exceeding thirty per cent per annum as is for the 13 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 time being fixed [by the Central Government, by notification in the Official Gazette,]] on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty:
Provided that where any duty ordered to be refunded under sub-section (2) of Section 11-B in respect of an application under sub-section (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, till the date of refund of such duty.
Explanation.-- Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal 4 [National Tax Tribunal] or any court against an order of the Assistant [Principal Commissioner of Central Excise or Commissioner of Central Excise] [or Deputy [Principal Commissioner of Central Excise or Commissioner of Central Excise]], under sub-section (2) of Section 11-B, the order passed by the Commissioner (Appeals), Appellate Tribunal [, National Tax Tribunal] or, as the case may be, by the court shall be deemed to be an order passed under the said sub-section (2) for the purposes of this section."
4.5 As per Circular No.984/08/2014-CX dated 16.09.2014 following has been clarified by the Board:-
"3. Payment 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 14 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 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.
5. Refund of pre-deposit:
5.1 Where the appeal is decided in favour of the party / assessee, he shall be entitled to refund of the amount deposited along with the interest at the prescribed rate 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, 1962."
4.6 On examination of the provisions of Section 35F, it is evident that the term pre-deposit needs to be interpreted as per the provisions of this Section. In fact the term pre-deposit has not been defined under Section 35F or Section 35FF the quantum i.e. to be deposited for the consideration of appeal has been defined/determined in this Section and it is provided that appeal should not be entertained till the aggrieved person i.e. appellant have deposited seven and half percent of duty in case where duty and penalty are in dispute. The provisions of amended Section 35F when read in contrast with the provisions as existed prior to substitution of this Section in 2014 by Act 25 of 2014 would make it clear that prior to this substitution appellant was required to make a deposit of 100% of the amount. The relevant provision as it existed then is reproduced bellow:-
"35F. Deposit, pending appeal of duty demanded or penalty levied. Where in any appeal under this Chapter, the decision or order appealed against relates to any duty 15 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 demanded in respect of goods which are not under the control of central excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied:
Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue."
4.7 Tribunal or the Appellate Authority as per this Section was empowered to reduce the amount of deposit in case making such deposit would cause undue hardship to the appellant. 4.8 When the introduction of new Section legislature in its wisdom as done away with the above requirement and have fixed the quantum of deposit to be made under Section 35F for the Tribunal or Appellate Authority to entertain the appeal filed, the words used in the amended Section 35F do not allow any other interpretation or modification of the amount that needs to be deposited as per this Section for the appeal to be entertained any amounts deposited in terms of this Section could not have been considered as a deposit made under this Section. 4.8 Section 35FF was also substituted by Act 25 of 2014 prior to its substitution. The said Section read as follows:-
"35FF. Interest on delayed refund of amount deposited under the proviso to section 35F-
Where an amount deposited by the appellant in pursuance of an order passed by the Commissioner (Appeals) or the Appellate Tribunal (hereinafter referred to as the appellate authority), under the first proviso to Section 35F, is required to be refunded consequent upon the order of the appellate authority and such amount is not refunded within 16 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 three months from the date of communication of such order to the adjudicating authority, unless the operation of the order of the appellate authority is stayed by a superior court or tribunal, there shall be paid to the appellant interest at the rate specified in Section 11BB after the expiry of three months from the date of communication of the order of the appellate authority, till the date of refund of such amount".
4.9 As per the Section 35FF prior to the amendment the interest was payable after the expiry of three months from the date of communication of the order of Appellate Authority till the date of such refund. On combine reading of Section 35F and 35FF as it existed prior to its substitution before by Act of 25 of 2014 would show that-
i. Appellate Authority i.e. Commissioner (Appeals) or Tribunal were having discretion to consider and prescribe the amount to be deposited for entertaining the appeal. ii. On the amount considered as a deposit under these provisions in case Final Order was in favour of the appellant then amount so deposited under Section 35F was refundable to the appellant alongwith interest if not paid within three months from the date of communication of the order of the Appellate Authority.
4.10 After substitution, Appellate Authority do not have any discretion to determine the amount to be considered for entraining the appeal, the amount has been fixed statutory and the said amount is only governed by the provisions of Section 35F and 35FF.
Any amount deposited in excess of the said amount determined under Section 35F will be governed by the provisions of Section 11B. Section 11B clearly provides that in case of the refund arising in such cases the relevant date will be as per explanation (b) (ec) which reads as follows:-
"(ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or 17 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction."
and interest will be governed by the provisions of Section 11BB.
Clarification issued by the Board takes note of the above and clarifies that only the amount determined as per Section 35FF will be refunded along with interest as per the amended Section 35FF and any other amount would be governed by the provisions of Section 11B read with Section 11 BB.
4.11 Principle of strict interpretation/ literal interpretation of the Fiscal Statutes has been approved by a five judges bench of Hon'ble Supreme Court in the case of Dilip Kumar & Company [2018 (361) E.L.T. 577 (S.C.)] observing as follows:
"14. An Act of Parliament/Legislature cannot foresee all types of situations and all types of consequences. It is for the Court to see whether a particular case falls within the broad principles of law enacted by the Legislature. Here, the principles of interpretation of statutes come in handy. In spite of the fact that experts in the field assist in drafting the Acts and Rules, there are many occasions where the language used and the phrases employed in the statute are not perfect. Therefore, Judges and Courts need to interpret the words.
15. In doing so, the principles of interpretation have been evolved in common law. It has also been the practice for the appropriate legislative body to enact Interpretation Acts or General Clauses Act. In all the Acts and Regulations, made either by the Parliament or Legislature, the words and phrases as defined in the General Clauses Act and the principles of interpretation laid down in General Clauses Act are to be necessarily kept in view. If while interpreting a Statutory law, any doubt arises as to the meaning to be assigned to a word or a phrase or a clause used in an enactment and such 18 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 word, phrase or clause is not specifically defined, it is legitimate and indeed mandatory to fall back on General Clauses Act. Notwithstanding this, we should remember that when there is repugnancy or conflict as to the subject or context between the General Clauses Act and a statutory provision which falls for interpretation, the Court must necessarily refer to the provisions of statute.
16. The purpose of interpretation is essentially to know the intention of the Legislature. Whether the Legislature intended to apply the law in a given case; whether the Legislature intended to exclude operation of law in a given case; whether Legislature intended to give discretion to enforcing authority or to adjudicating agency to apply the law, are essentially questions to which answers can be sought only by knowing the intention of the legislation. Apart from the general principles of interpretation of statutes, there are certain internal aids and external aids which are tools for interpreting the statutes.
17. The long title, the preamble, the heading, the marginal note, punctuation, illustrations, definitions or dictionary clause, a proviso to a section, explanation, examples, a schedule to the Act etc., are internal aids to construction. The external aids to construction are Parliamentary debates, history leading to the legislation, other statutes which have a bearing, dictionaries, thesaurus.
18. It is well accepted that a statute must be construed according to the intention of the Legislature and the Courts should act upon the true intention of the legislation while applying law and while interpreting law. If a statutory provision is open to more than one meaning, the Court has to choose the interpretation which represents the intention of the Legislature. In this connection, the following observations made by this Court 19 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 in District Mining Officer v. Tata Iron and Steel Co., (2001) 7 SCC 358, may be noticed :
"... A statute is an edict of the Legislature and in construing a statute, it is necessary, to seek the intention of its maker. A statute has to be construed according to the intent of them that make it and the duty of the Court is to act upon the true intention of the Legislature. If a statutory provision is open to more than one interpretation the Court has to choose that interpretation which represents the true intention of the Legislature. This task very often raises the difficulties because of various reasons, inasmuch as the words used may not be scientific symbols having any precise or definite meaning and the language may be an imperfect medium to convey one‟s thought or that the assembly of Legislatures consisting of persons of various shades of opinion purport to convey a meaning which may be obscure. It is impossible even for the most imaginative Legislature to forestall exhaustively situations and circumstances that may emerge after enacting a statute where its application may be called for. Nonetheless, the function of the Courts is only to expound and not to legislate. Legislation in a modern State is actuated with some policy to curb some public evil or to effectuate some public benefit. The legislation is primarily directed to the problems before the Legislature based on information derived from past and present experience. It may also be designed by use of general words to cover similar problems arising in future. But, from the very nature of things, it is impossible to anticipate fully the varied situations arising in future in which the application of the legislation in hand may be called for, and, words chosen to communicate such indefinite referents are bound to be in many cases lacking in clarity and precision and thus giving rise to controversial questions of construction. The process of construction combines both literal and purposive 20 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 approaches. In other words the legislative intention, i.e., the true or legal meaning of an enactment is derived by considering the meaning of the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief and its remedy to which the enactment is directed..."
19. The well-settled principle is that when the words in a statute are clear, plain and unambiguous and only one meaning can be inferred, the Courts are bound to give effect to the said meaning irrespective of consequences. If the words in the statute are plain and unambiguous, it becomes necessary to expound those words in their natural and ordinary sense. The words used declare the intention of the Legislature. In Kanai Lal Sur v. Paramnidhi Sadhukhan, AIR 1957 SC 907, it was held that if the words used are capable of one construction only then it would not be open to the Courts to adopt any other hypothetical construction on the ground that such construction is more consistent with the alleged object and policy of the Act.
20. In applying rule of plain meaning any hardship and inconvenience cannot be the basis to alter the meaning to the language employed by the legislation. This is especially so in fiscal statutes and penal statutes. Nevertheless, if the plain language results in absurdity, the Court is entitled to determine the meaning of the word in the context in which it is used keeping in view the legislative purpose [Assistant Commissioner, Gadag Sub- Division, Gadag v. Mathapathi Basavannewwa, 1995 (6) SCC 355]. Not only that, if the plain construction leads to anomaly and absurdity, the Court having regard to the hardship and consequences that flow from such a provision can even explain the true intention of the legislation. Having observed general principles applicable to statutory interpretation, it is now time to consider rules of interpretation with respect to taxation.
21 Excise Appeal Nos.70301 of 2020 &70689 of 2021
21. In construing penal statutes and taxation statutes, the Court has to apply strict rule of interpretation. The penal statute which tends to deprive a person of right to life and liberty has to be given strict interpretation or else many innocent might become victims of discretionary decision-making. Insofar as taxation statutes are concerned, Article 265 of the Constitution [265. Taxes not to be imposed save by authority of law - No tax shall be levied or collected except by authority of law.] prohibits the State from extracting tax from the citizens without authority of law. It is axiomatic that taxation statute has to be interpreted strictly because State cannot at their whims and fancies burden the citizens without authority of law. In other words, when competent Legislature mandates taxing certain persons/certain objects in certain circumstances, it cannot be expanded/ interpreted to include those, which were not intended by the Legislature.
22. At the outset, we must clarify the position of „plain meaning rule or clear and unambiguous rule‟ with respect of tax law. „The plain meaning rule‟ suggests that when the language in the statute is plain and unambiguous, the Court has to read and understand the plain language as such, and there is no scope for any interpretation. This salutary maxim flows from the phrase "cum inverbis nulla ambiguitas est, non debet admitti voluntatis quaestio". Following such maxim, the Courts sometimes have made strict interpretation subordinate to the plain meaning rule [Mangalore Chemicals case (Infra para 37).], though strict interpretation is used in the precise sense. To say that strict interpretation involves plain reading of the statute and to say that one has to utilize strict interpretation in the event of ambiguity is self- contradictory.
23. Next, we may consider the meaning and scope of „strict interpretation‟, as evolved in Indian law and how 22 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 the higher Courts have made a distinction while interpreting a taxation statute on one hand and tax exemption notification on the other. In Black‟s Law Dictionary (10th Edn.) „strict interpretation‟ is described as under :
Strict interpretation. (16c) 1. An interpretation according to the narrowest, most literal meaning of the words without regard for context and other permissible meanings. 2. An interpretation according to what the interpreter narrowly believes to have been the specific intentions or understandings of the text‟s authors or ratifiers, and no more. - Also termed (in senses 1 & 2) strict construction, literal interpretation; literal construction; restricted interpretation; interpretatio stricta; interpretatio restricta; interpretatio verbalis. 3. The philosophy underlying strict interpretation of statutes.
- Also termed as close interpretation; interpretatio restrictive.
See strict constructionism under constructionism. Cf. large interpretation; liberal interpretation (2).
"Strict construction of a statute is that which refuses to expand the law by implications or equitable considerations, but confines its operation to cases which are clearly within the letter of the statute, as well as within its spirit or reason, not so as to defeat the manifest purpose of the legislature, but so as to resolve all reasonable doubts against the applicability of the statute to the particular case.‟ Wiliam M. Lile et al., Brief Making and the use of Law Books 343 (Roger W. Cooley & Charles Lesly Ames eds., 3d ed. 1914).
"Strict interpretation is an equivocal expression, for it means either literal or narrow. When a provision is ambiguous, one of its meaning may be wider than the other, and the strict (i.e., narrow) sense is not necessarily the strict (i.e., literal) sense." John Salmond, 23 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 Jurisprudence 171 n. (t) (Glanville L. Williams ed., 10th ed. 1947).
24. As contended by Ms. Pinky Anand, Learned Additional Solicitor General, the principle of literal interpretation and the principle of strict interpretation are sometimes used interchangeably. This principle, however, may not be sustainable in all contexts and situations. There is certainly scope to sustain an argument that all cases of literal interpretation would involve strict rule of interpretation, but strict rule may not necessarily involve the former, especially in the area of taxation. The decision of this Court in Punjab Land Development and Reclamation Corporation Ltd., Chandigarh v. Presiding Officer, Labour Court Chandigarh and Ors., (1990) 3 SCC 682, made the said distinction, and explained the literal rule-
"The literal rules of construction require the wording of the Act to be construed according to its literal and grammatical meaning whatever the result may be. Unless otherwise provided, the same word must normally be construed throughout the Act in the same sense, and in the case of old statutes regard must be had to its contemporary meaning if there has been no change with the passage of time."
That strict interpretation does not encompass strict - literalism into its fold. It may be relevant to note that simply juxtaposing „strict interpretation‟ with literal rule‟ would result in ignoring an important aspect that is „apparent legislative intent‟. We are alive to the fact that there may be overlapping in some cases between the aforesaid two rules. With certainty, we can observe that, „strict interpretation‟ does not encompass such literalism, which lead to absurdity and go against the legislative intent. As noted above, if literalism is at the far end of the spectrum, wherein it accepts no implications or inferences, then „strict interpretation‟ can be implied to 24 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 accept some form of essential inferences which literal rule may not accept.
25. We are not suggesting that literal rule de hors the strict interpretation nor one should ignore to ascertain the interplay between „strict interpretation‟ and „literal interpretation‟. We may reiterate at the cost of repetition that strict interpretation of a statute certainly involves literal or plain meaning test. The other tools of interpretation, namely contextual or purposive interpretation cannot be applied nor any resort be made to look to other supporting material, especially in taxation statutes. Indeed, it is well-settled that in a taxation statute, there is no room for any intendment; that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification. Equity has no place in interpretation of a tax statute. Strictly one has to look to the language used; there is no room for searching intendment nor drawing any presumption. Furthermore, nothing has to be read into nor should anything be implied other than essential inferences while considering a taxation statute." The view which has emerged in the para 4.3 to 4.12 is based on the principles of interpretation as has been laid down by the Hon'ble Apex Court in this decision.
4.12 Commissioner (Appeals) have in the impugned order dated 2019 has after taking note of the Board Circular held so. Accordingly, the findings recorded by the Commissioner (Appeals) cannot be faulted with. In order dated 27.05.2020 Commissioner (Appeals) has upheld the order of Original authority to the extent of demand for erroneous refund granted. 4.13 Appellant have relied upon various decisions of this Tribunal which relies upon the decision of Hon'ble Supreme Court in case of M/s Sandvik Asia Ltd. In case of M/s Willowood Chemicals Pvt. Ltd. [2022 (60) GSTL 3 (SC)] Hon'ble Supreme Court has considered the case of M/s Sandvik Asia Ltd. and all other similar decisions to hold as follows:-
25 Excise Appeal Nos.70301 of 2020 &70689 of 2021 "16. We, therefore, proceed to consider the merits. Turning to the basic question it must be noted that in the following cases, this Court dealt with the question as to payment of interest on the amount due by way of refund :
(A) In Modi Industries Ltd. and Another v. Commissioner of Income Tax and Another [(1995) 6 SCC 396] a Bench of three Judges of this Court was called upon to consider the effect of Section 214 of the Income-tax Act, 1961, and the questions which arose were set out as under :
"We shall now indicate how the controversy relating to the meaning of the expression "regular assessment" arises: an assessee pays advance tax according to his estimate of his income during the financial year relevant to the particular assessment year. He then files a return and an assessment is made under Section 143. It is found that he has paid more amount by way of advance tax than the amount of tax assessed. He will be refunded the extra amount with interest calculated from the first day of April of that assessment year to the date of assessment. No difficulty arises in such a case. The difficulty arises in the following situation: indeed it is one of the many situations - not satisfied with the order of assessment, the assessee files an appeal. The appeal is allowed as a consequence of which, the assessment order is revised. As a result of such revised assessment made pursuant to the appellate order, the tax refundable to the assessee becomes larger - say whereas, according to the original assessment he was entitled to refund of Rs. 10,000/-, he becomes entitled to a total refund of Rs. 15,000/- as a result of revised assessment made pursuant to the appellate order. The question is - on what amount and upto which date is the interest payable? On being elaborated, the question yields the following sub-questions :
(a) is the interest payable only on Rs. 10,000/- and if so, whether the interest is payable till the date of first/original assessment or till the date of the revised assessment?26 Excise Appeal Nos.70301 of 2020 &
70689 of 2021
(b) is the interest payable on Rs. 15,000/- and if payable, is it payable only till the date of first/original assessment or till the date of the revised assessment?
After considering various decisions on the point, the conclusion drawn by the Court was :
"The argument, which was upheld in some of the cases now under appeal, is that it will be inequitable if the assessee does not get interest on the amount of advance tax paid, when the amount paid in advance is refunded pursuant to an appellate order. This is not a question of equity. There is no right to get interest on refund except as provided by the statute. The interest on excess amount of advance tax under Section 214 is not paid from the date of payment of the tax. Nor is it paid till the date of refund. It is paid only upto the date of the regular assessment. No interest is at all paid on excess amount of tax collected by deduction at source. Before introduction of Section 244(1A) the assessee was not entitled to get any interest from the date of payment of tax upto the date of the order as a result of which excess realisation of tax became refundable. Interest under Section 243 or Section 244 was payable only when the refund was not made within the stipulated period upto the date of refund. But, if the assessment order was reduced in appeal, no interest was payable from the date of payment of tax pursuant to the assessment order to the date of the appellate order.
Therefore, interpretation of Section 214 or any other section of the Act should not be made on the assumption that interest has to be paid whenever an amount which has been retained by the tax authority in exercise of statutory power becomes refundable as a result of any subsequent proceeding. (Emphasis supplied) (B) In Godavari Sugar Mills Ltd., a Bench of two Judges of this Court considered the question whether interest on the compensation amount at the rate of 9 per cent per annum could be awarded when the terms of Section 6 of the Maharashtra Agriculture Lands (Ceiling of Holdings) Act, 1961 prescribed 27 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 payment of interest only at the rate of 3 per cent per annum.
The discussion on the point was :
"9. There is considerable force in thesubmissions of Ms. Madhavi Divan, the Learned Counsel for the respondents that the decisions of the Bombay High Court in Krishnakumar [W.P. No. 83 of 1986, decided on 29-6-1991 (Bom.)] and Changdeo [ W.P. No. 3805 of 2000, decided on 7-7-2000 (Bom.)] are not sound, as they completely ignore Section 26 of the Act, while awarding interest at 9% per annum on the belated payment of compensation.
10. The question as to when and in what circumstances, interest could be awarded on belated payment of compensation, was considered by this Court in Union of India v. Parmal Singh [(2009) 1 SCC 618]. This Court first referred to the general principle and then the exceptions thereto, as under : (SCC pp. 624-25, paras 12-13) "12. When a property is acquired, and law provides for payment of compensation to be determined in the manner specified, ordinarily compensation shall have to be paid at the time of taking possession in pursuance of acquisition. By applying equitable principles, the courts have always awarded interest on the delayed payment of compensation in regard to acquisition of any property. ...
13. ... The said general principle will not apply in two circumstances. One is where a statute specifies or regulates the interest. In that event, interest will be payable in terms of the provisions of the statute. The second is where a statute or contract dealing with the acquisition specifically bars or prohibits payment of interest on the compensation amount. In that event, interest will not be awarded. Where the statute is silent about interest, and there is no express bar about payment of interest, any delay in paying the compensation or enhanced compensation for acquisition would require award of interest at a reasonable rate on equitable grounds."28 Excise Appeal Nos.70301 of 2020 &
70689 of 2021 This Court, dealing with an acquisition under the Defence of India Act, 1962 (which did not contain any provision either requiring or prohibiting payment of interest), upheld the award of interest at 6% per annum.
11. Section 24 of the Act requires the Collector, after possession of surplus land was taken over under Section 21(4) of the Act, to cause public notice requiring persons interested to lodge their claims. Section 25 of the Act provides for determination of compensation and apportionment thereof. Section 26 deals with mode of payment of amount of compensation and the same is extracted below :
"Mode of payment of amount of 26. compensation. The amount of compensation may, subject to the - (1) provisions of subsection (3), be payable in transferable bonds carrying interest at three per cent per annum.
The bonds shall be - (2)
(a) of the following denominations, namely - Rs. 50;
Rs. 100; Rs. 200; Rs. 500; Rs. 1000; Rs. 5000 and Rs. 10,000; and
(b) of two classes - one being repayable during a period of twenty years from the date of issue by equated annual instalment of principal and interest, and the other being redeemable at par at the end of a period of twenty years from the date of issue. It shall be at the option of the person receiving compensation to choose payment in one or other class of bonds, or partly in one class and partly in another.
Where the amount of compensation or any part (3) thereof, cannot be paid in the aforesaid denomination, it may be paid in cash." (Emphasis supplied) The said section contemplates the payment of compensation with interest at 3% per annum in annual instalments spread over a period of 20 years or at the end of 20 years. It also 29 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 contemplates payment being made either by transferable bonds or in cash. Sub-section (3) of Section 26 enabling payment of compensation by cash, in cases where it could not be paid by such bonds, does not disturb the rate of interest, which is 3% per annum for 20 years, provided in sub-section (1) thereof. We are therefore of the view that whether the payment is made by transferable bonds or by cash, the rate of interest can be only at 3% per annum for a period of 20 years from the date of taking possession.
12. The next question that requires consideration is about the rate of interest if the payment is not made even after 20 years, and whether it should be only at the rate of 3% per annum, even after 20 years. Section 26 is silent about the rate of interest payable, if the compensation is not paid within 20 years. We are therefore of the view that Section 26 contemplates payment of the compensation within 20 years from the date of taking possession with interest at 3% per annum; and for the period beyond 20 years, the said provision regarding interest will cease to apply and the general equitable principles relating to interest will apply; and interest can be awarded at any reasonable rate, in the discretion of the court. Interest at the rate of 6% per annum, beyond 20 years would be appropriate and payable on equitable principles."
(C) In Sandvik Asia Ltd., a Bench of two Judges of this Court was called upon to consider whether the inordinate delay of about 12 to 17 years in making a refund would entitle grant of interest. In the facts of that case, interest at the rate of 9 per cent per annum from 31-3-1986 to 27-3-1998 was granted. Even while doing so this Court observed :
"48. There cannot be any doubt that the award of interest on the refunded amount is as per the statutory provisions of law as it then stood and on the peculiar facts and circumstances of each case. When a specific provision has been made under the statute, such provision has to govern the field. Therefore, the court has to take all relevant factors into consideration while awarding the rate of interest on the compensation."30 Excise Appeal Nos.70301 of 2020 &
70689 of 2021 (D) In Gujarat Fluoro Chemicals, the correctness of the decision in Sandvik Asia Ltd. came up for consideration before a Bench of three Judges of this Court, and the matter was considered thus :
"3. In order to answer the aforesaid issue before us, we have carefully gone through the judgment of this Court in Sandvik case [Sandvik Asia Ltd. v. CIT, (2006) 2 SCC 508] and the order of reference. We have also considered the submissions made by the parties to the lis.
4. We would first throw light on the reasoning and the decision of this Court on the core issue in Sandvik case [Sandvik Asia Ltd. v. CIT, (2006) 2 SCC 508]. The only issue formulated by this Court for its consideration and decision was whether an assessee is entitled to be compensated by the Income Tax Department for the delay in paying interest on the refunded amount admittedly due to the assessee. This Court in the facts of the said case had noticed that there was delay of various periods, ranging from 12 to 17 years, in such payment by the Revenue. This Court had further referred to the several decisions which were brought to its notice and also referred to the relevant provisions of the Act which provide for refunds to be made by the Revenue when a superior forum directs refund of certain amounts to an assessee while disposing of an appeal, revision, etc. Since there was an inordinate delay on the part of the Revenue in refunding the amount due to the assessee this Court had thought it fit that the assessee should be properly and adequately compensated and therefore in para 51 of the judgment, the Court while compensating the assessee had directed the Revenue to pay a compensation by way of interest for two periods, namely, for Assessment Years 1977-1978, 1978-1979, 1981-1982, 1982-1983 in a sum of Rs. 40,84,906 and interest @ 9% from 31-3-1986 to 27-3-1998 and in default, to pay the penal interest @ 15% per annum for the aforesaid period.
5. In our considered view, the aforesaid judgment has been misquoted and misinterpreted by the assessees and also by the Revenue. They are of the view that in Sandvik case [Sandvik 31 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 Asia Ltd. v. CIT, (2006) 2 SCC 508] this Court had directed the Revenue to pay interest on the statutory interest in case of delay in the payment. In other words, the interpretation placed is that the Revenue is obliged to pay an interest on interest in the event of its failure to refund the interest payable within the statutory period.
6. As we have already noticed, in Sandvik case [Sandvik Asia Ltd. v. CIT, (2006) 2 SCC 508] this Court was considering the issue whether an assessee who is made to wait for refund of interest for decades be compensated for the great prejudice caused to it due to the delay in its payment after the lapse of statutory period. In the facts of that case, this Court had come to the conclusion that there was an inordinate delay on the part of the Revenue in refunding certain amount which included the statutory interest and therefore, directed the Revenue to pay compensation for the same not an interest on interest."
17.Since reliance was placed by the High Court on the decision of the Constitution Bench of this Court in K.T. Plantation Pvt. Ltd. and Anr., we must note that what arose for consideration in that case, was the constitutional validity of the Devika Rani Roerich Estate (Acquisition & Transfer) Act, 1996, and Section 110 of the Karnataka Lands Reforms Act, 1996 and certain notifications issued by the State Government. The questions which arose for consideration were set out in paragraph 25 of the decision as under :-
"Whether the relevant provisions violated the basic structure of the Constitution in so far as they conferred power on the executive government for withdrawal of exception without hearing and without reasons and whether the provisions of the Acquisition Act were protected by Article 31(A) of the Constitution and whether they were violative of Article 300(A) of the Constitution?"
After dealing with these questions, the reference was answered thus :
We, therefore, answer the reference as follows :32 Excise Appeal Nos.70301 of 2020 &
70689 of 2021
(a) Section 110 of the Land Reforms Act and the Notification dated 8-3-1994 are valid, and there is no excessive delegation of legislative power on the State Government.
(b) Non-laying of the Notification dated 8-3-1994 under Section 140 of the Land Reforms Act before the State Legislature is a curable defect and it will not affect the validity of the notification or action taken thereunder.
(c) The Acquisition Act is protected by Article 31A of the Constitution after having obtained the assent of the President and hence immune from challenge under Article 14 or 19 of the Constitution.
(d) There is no repugnancy between the provisions of the Land Acquisition Act, 1894 and the Rocrich and Devika Rani Rocrich Estate (Acquisition & Transfer) Act, 1996 (in short "the Acquisition Act"), and hence no assent of the President is warranted under Article 254(2) of the Constitution.
(e) Public purpose is a precondition for deprivation of a person from his property under Article 300A and the right to claim compensation is also inbuilt in that article and when a person is deprived of his property the State has to justify both the grounds which may depend on scheme of the statute, legislative policy, object and purpose of the legislature and other related factors.
(f) Statute, depriving a person of his property is, therefore, amenable to judicial review on grounds hereinbefore discussed."
The aforestated answers and especially one at serial (e) show the context in which the issue of compensation was considered by this Court, which is completely distinct and different from the issue with which we are presently concerned.
18. Coming back to the present cases, the relevant provision has prescribed rate of interest at 6 per cent where the case for refund is governed by the principal provision of Section 56 of the CGST Act. As has been clarified by this Court in Modi Industries Ltd. and Godavari Sugar Mills Ltd. wherever a statute 33 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 specifies or regulates the interest, the interest will be payable in terms of the provisions of the statute. Wherever a statute, on the other hand, is silent about the rate of interest and there is no express bar for payment of interest, any delay in paying the compensation or the amounts due, would attract award of interest at a reasonable rate on equitable grounds. It is precisely for this reason that paragraph 9 of the decision in Godavari Sugar Mills Ltd. accepted the submission made by the Learned Counsel for the respondents and confined the rate of interest to the prescription made in the statute. The award of interest at a rate in excess of what was prescribed by the statute was only for a period beyond 20 years where the matter was not strictly covered by the statute and as such it would be in the realm of discretion of the Court. It must also be noted here that the inordinate delay of up to 17 years in making refunds was a special circumstance when this Court was persuaded to accept grant of interest at the rate of 9 per cent per annum in Sandvik Asia Ltd. Even while doing so, the observations made by this Court in Paragraph 48 of the decision are quite clear that "the award of interest in refund and amount must be as per the statutory provisions of law and whenever a specific provision has been made under the statute such provision has to govern the field." The subsequent decision of the Bench of three Judges in Gujarat Fluoro Chemicals noticed that the grant of interest at the rate of 9 per cent was in the facts of the case in Sandvik Asia Ltd.
19. Since the delay in the instant case was in the region of 94 to 290 days and not so inordinate as was the case in Sandvik Asia Ltd., the matter has to be seen purely in the light of the concerned statutory provisions. In terms of the principal part of Section 56 of the CGST Act, the interest would be awarded at the rate of 6 per cent. The award of interest at 9 per cent would be attracted only if the matter was covered by the proviso to the said Section 56. The High Court was in error in awarding interest at the rate exceeding 6 per cent in the instant matters.
20. We, therefore, allow these appeals and direct that the original writ petitioners would be entitled to interest at the rate of 6 per cent per annum on amounts that they were 34 Excise Appeal Nos.70301 of 2020 & 70689 of 2021 entitled by way of refund of tax. Since the concerned amounts along with interest at the rate of 6 per cent per annum have already been made over to them, nothing further need be done in both the cases.
21.The instant Civil Appeals are thus allowed to the extent indicated above without any order as to costs.
4.14 As the decision of Hon'ble Supreme Court has in the said decision clearly held that the refund of any amount as provided by the statute needs to be considered in terms of provisions of statute, even the refund of interest will governed by the provisions of said statute that being so granting interest on the entire amount from the date of deposit cannot be said to be correct in the light of the provisions of sections referred above and the decision of Hon'ble Apex Court in case of M/s Willowood Chemicals Pvt. Ltd. Thus, order of Commissioner (Appeals) cannot be faulted with.
5.1 Appeals are dismissed.
(Pronounced in open court on-28 May, 2024) Sd/-
(SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp