2014 (10) TMI 273 - AT - Central Excise

Tribunal rules no interest payable on duty; retrospective amendments impermissible.

PUSHTI REFINERIES (P) LTD. Versus COMMR. OF C. EX., CUS. & ST., BANGALORE-I

The Tribunal allowed the appeal in favor of the Appellant, ruling that no interest was payable on the duty amount already paid due to a retrospective ... Imposition of interest - amendment of Chapter 15 came on 13-5-2005 with retrospective effect - Whether the appellant is liable to pay interest on the duty amount of ₹ 1,66,220/- already paid by them or not - Held that:- when liability is extended by way of amendment to Finance Act with retrospective effect, retrospectivity is not permissible to create an offence retrospectively and further liability to payment of interest cannot be said to have been created with retrospective effect. In my opinion both these decisions apply to the facts of this case. As regards the decision in the case of SKF India Ltd. [2009 (7) TMI 6 - SUPREME COURT] in that case Hon’ble Supreme Court was not considering the consequences of retrospective amendment and therefore the decision of the Hon’ble Supreme Court where the issue involved is same has to be preferred to the one where a general decision in principal has been taken. In any case the decision in the case of SKF India Ltd. was relevant to the cases where supplementary invoice has been issued by a party whereby the value has increased - Decided in favour of assessee. Issues: Liability to pay interest on duty amount already paid.Analysis:The appellant, a manufacturer of refined edible oil, was in question regarding the liability to pay interest on the duty amount of Rs. 1,66,220 already paid by them. The learned CA for the Appellant referred to a previous Tribunal case and a Supreme Court decision where it was held that no interest is payable in similar circumstances. On the other hand, the learned AR for the Respondent relied on a different Supreme Court decision, arguing that it should take precedence due to being a later decision. The Tribunal noted that the previous Tribunal case had already considered the issue and concluded that no interest was payable due to retrospective amendment of the Finance Act. Additionally, the Tribunal found that the Supreme Court decision cited by the Appellant also supported the Appellant's position, stating that creating an offense retrospectively is impermissible. The Tribunal distinguished another Supreme Court decision cited by the Respondent, emphasizing that it did not address the consequences of retrospective amendment. Consequently, the Tribunal concluded that the decisions cited by the Appellant were relevant, and the appeal was allowed in favor of the Appellant with any consequential relief granted.