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TAXAP/218/2009 8/ 8 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 218 of 2009
=========================================
COMMISSIONER
OF CUSTOMS - Appellant(s)
Versus
BOCHASANWASI
AKSHAR PURSHOTTAM SWAMINARAYAN SANSTHA (BAPS) - Opponent(s)
=========================================
Appearance :
MS
AMEE YAJNIK for
Appellant(s) : 1,
None for Opponent(s) :
1,
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CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 10/03/2010
ORAL
ORDER
(Per
: HONOURABLE MS.JUSTICE H.N.DEVANI)
In
this appeal under section 130 of the Customs Act, 1962 (the Act),
the appellant revenue has challenged order dated 19.8.2008 passed by
the Customs, Excise & Service Tax Appellate Tribunal (the
Tribunal) proposing the following questions stated to be substantial
questions of law:
[1] Whether
the Hon’ble CESTAT’s order whereby only one of the components of the
Assessable Value namely FOB was decided, but remaining components of
Assessable Value namely Freight and Insurance were not decided and
the case was remanded for re-determination of value and duty, can be
termed as final order?
[2] Whether
interest liability arises from the date of the said order of the
Hon’ble CESTAT whereby the case was remanded for re-determination of
value and duty or from the date of order finalizing assessment
whereby value and duty have been finally assessed by considering the
directions of the Hon’ble CESTAT?
[3] Whether,
in the normal course, pre-deposit should be refunded as soon as the
Tribunal’s order is passed by finalizing the assessment as the same
assessment was finalized by order of the Deputy Commissioner on
21.06.2007 and refund was given before that order?
The
facts of the case are that there was a valuation dispute for the
purpose of levy of duty on import of marble blocks of Italian
origin, imported by the respondent. The value declared in the
invoices and on the Bill of Entry was US $ 85 PMT, whereas the
Deputy Commissioner ICD/CFS, Sabarmati, determined the value of the
goods at US $ 300 PMT and worked out and confirmed total duty
amounting to Rs.8,36,46,140/-. The Deputy Commissioner of Customs
directed the respondent-importer to pay the differential duty after
having adjusted the amount already paid as provisional duty. The
respondent preferred appeal before the Commissioner (Appeals), who
granted stay vide order dated 23.12.2004 and directed the respondent
to pay Rs.1.25 crore by way of pre-deposit as a condition precedent
for hearing the appeal on merits. The respondent deposited Rs.25
lakh vide challans dated 38.3.2005 and furnished a Bank Guarantee
dated 19.04.2005 for the remaining amount of Rs.1 crore. The
respondent s appeal came to be dismissed vide order-in-appeal
dated 29.06.2005 and the Bank Guarantee of Rs.1 crore came to be
encashed. Against the order of Commissioner (Appeals) the
respondent preferred second appeal before the Tribunal. The Tribunal
vide order dated 3rd January 2006 ordered assessment of
the consignment at the rate of US $ 95 PMT (FOB) plus freight and
insurance and remanded the matter to the adjudicating authority for
re-determination of value and duty in terms of its order. The
revenue carried the matter in appeal before the Supreme Court, which
came to be dismissed vide judgment and order dated 12th
November 2006.
The
respondent vide letter dated 1st December, 2006 requested
for refund of Rs.1.25 crores deposited/recovered from it along with
interest. The Deputy Commissioner sanctioned the refund, but
rejected the request for the interest accrued thereon. The
respondent carried the matter in appeal before Commissioner
(Appeals) and succeeded. The revenue challenged the decision of
Commissioner (Appeals) before the Tribunal, which came to be
dismissed by the impugned order dated 19.8.2008.
Assailing
the impugned order of the Tribunal, Ms. Amee Yajnik, learned Senior
Standing Counsel for the appellant-revenue submitted that both
Commissioner (Appeals) as well as the Tribunal had erred in holding
that the respondent assessee would be entitled to interest on refund
of pre-deposit of Rs.1.25 crores from the first day subsequent to
three months of passing of the order of the Tribunal. It was
submitted that the Tribunal had ordered assessment of the
consignment at the price of US $ 95 PMT (FOB) plus freight and
insurance as per actuals to be made available by the respondent
failing which the standard rate prescribed in the rules for freight
and insurance would be applicable. That the Tribunal had decided the
rate of one of the components of the assessable value, viz., FOB,
but the remaining components of assessable value viz. freight and
insurance were still undecided. It was for this reason that the
Tribunal had remanded the matter for re-determination of value and
duty, hence, it cannot be said that the order made by the Tribunal
remanding the case for re-determination had attained finality.
According to the appellant, as the Tribunal had remanded the case,
the assessment remained provisional and was finalized only by the
order-in-original dated 21.06.2007 and as such liability to pay
interest would arise only after re-determination of the value and
duty by the adjudicating authority in terms of the order of Tribunal
and not from the date of the order of Tribunal.
From
the facts emerging on record, the entitlement of the respondent to
refund of the amount of Rs.1.25 crore is not in dispute and
accordingly the Deputy Commissioner has vide the order-in-original
dated 22.12.2007 himself sanctioned the refund. However, the claim
for interest on delayed refund had been turned down on the ground
that the claim did not fall within the purview of section 27 of the
Act. The Commissioner (Appeals) placed reliance on the decisions of
the Supreme Court cited by the respondent in Union of India
v. Sandvik Asia Ltd., 2006 (196) ELT 257, Mahavir
Aluminium Ltd. v. CCE, 1999 (114) ELT 371 and M/s
TATA SSL Ltd., 2007 (218) ELT 493 for the proposition that
interest should be paid from the first day subsequent to three
months of the passing of the order, which was also borne out from
the relevant CBEC Circulars and accordingly upheld the contention of
the respondent and allowed the appeal.
In
the impugned order, The Tribunal after considering the submissions
advanced by both the sides has held thus:
It
is seen that the Central Board of Excise & Customs in their
Circulars dated 2.1.2002 and 8.12.2004 has clearly directed that
interest should be paid on pre-deposits. The dispute is as to whether
the decision of the CESTAT remanding the matter finalizing the issue
has attained and or can it be only said that when the matter was
decided by the Hon’ble Supreme Court rejecting the appeal filed by
the revenue, the assessment could have been finalized. The order of
the CESTAT was very clear and there was clear direction that value of
the marble block imported by the respondents should be assessed at 95
$ per MT and therefore, as argued by the learned counsel for the
respondents, there was nothing left for decision by the original
authority except quantification of duty which he has done. Therefore,
in the normal course, if the Revenue had not filed appeal
against this order, the pre-deposit was required to be refunded in
view of the fact that Hon’ble Supreme Court had not granted any stay
in this case. In the normal course pre-deposit should be refunded as
soon as the Tribunal order was passed by finalizing the assessment.
In the absence of a stay by the Hon’ble Supreme Court and the Board’s
instruction finalization of assessment and refund was warranted and
therefore, interest liability arises from the date of the order of
the Tribunal and not the date of judgment of the Hon’ble Supreme
Court. In this view of the matter, we hold that the impugned order
of Commissioner (Appeals) is to be upheld and accordingly, we reject
the appeal filed by the Revenue against the order.
Thus,
it is apparent that CBEC Circulars dated 2.1.2002 and
8.12.2004 provide for payment of interest on pre-deposits. Hence,
without reference to section 27 or 27A of the Act, interest is
payable on pre-deposit in terms of the aforesaid Circulars. The
question therefore, is as to the date from which interest liability
would arise on delayed payment of refund. It is the case of the
Revenue that vide order dated 3.1.2006, the Tribunal had remanded
the case for re-determination of value and duty and thus the case
had not attained finality. That after the Supreme Court dismissed
the appeal preferred by the revenue vide order dated 17.11.2006, the
assessment was finalized vide order-in-original dated 21.06.2007.
According to the revenue such liability would arise only from the
date when the assessment was finalized, which according to the
revenue is the date when the adjudicating authority finalized the
assessment in terms of the order of the Tribunal. Hence, the
liability to pay interest would arise only after the said order. The
submission of the revenue is fallacious. It is undisputed that no
stay had been granted by the Supreme Court against the order of the
Tribunal. Hence, revenue was bound to implement it immediately and
re-determine the value and duty in terms of the said order. However,
it appears that revenue granted a stay to itself and did not abide
by the order of the Tribunal till more than six months even after
the date of dismissal of its appeal by the Supreme Court. If the
said contention were accepted, revenue could at its will delay the
re-determination of the value and duty in terms of the order of the
Tribunal and avoid payment of refund as well as interest thereon.
It is well settled that revenue cannot be permitted to take
advantage of its own wrong. Hence, the said contention does not
merit acceptance.
Vide
order dated 3.1.2006, the Tribunal had finalized the assessment and
had directed that the value of the marble blocks imported by the
respondent should be assessed at US $ 95 PMT, hence there was
nothing left for the original authority to finalize except
quantification of duty, which he appears to have done at a belated
stage. As per the Board s instructions interest liability arises
from the date of finalization of assessment. In the present case the
assessment came to be finalized by the order dated 3.1.2006 of the
Tribunal as the said order was not stayed at any point of time and
the appeal against the same came to be dismissed. Hence, liability
to pay interest would arise from the date of the order of the
Tribunal. In the circumstances, the impugned order of the Tribunal
confirming the order made by Commissioner (Appeals) does not suffer
from any legal infirmity so as to warrant interference.
In
absence of any question of law, much less any substantial question
of law, the appeal is dismissed.
[D.A.MEHTA,
J.]
[HARSHA
DEVANI, J.]
parmar*
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