AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (11) TMI 534
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....tor of Central Excise, Patna, directed Assistant Collector to file an appeal against the order passed by the said Collector of Central Excise dated 30-7-1984 approving the classification before the Collector (Appeals), Central Excise. In view of the direction of the Collector of Central Excise, the appeal filed by the Department was allowed by the Collector (Appeals), Kolkata, who set aside the classification list dated 31-7-1984 and held that corrugated sheet should be classified under erstwhile Tariff Item No. 68 for the period from 4th August, 1983 to 16th March, 1985 and directed the petitioner to pay duty on plain sheet during the period 1st August, 1983 and thereafter corrugated sheet under Tariff Item No. 68 and the authorities raised demand on differential duties under Tariff Item No. 68. 3. The petitioner being aggrieved against the order dated 31th October, 1985 preferred a writ petition being CWJC No. 219/1986R and a Division Bench of Patna High Court passed an interim order on 30th April, 1986, which is as under :- "Without going into this question, we direct that no further steps in pursuance of annexure 8 shall be taken during the pendency of this writ petition....
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....or (Appeals) dated 31st October, 1985 and 24th December, 1985 respectively and the show cause-cum-demand notices dated 14th May, 1985 and 11th September, 1986 respectively were quashed. It will be made clear that Hon'ble Supreme Court quashed two orders and two demand notices as two appeals were decided by the judgment rendered in Civil Appeal No. 1461/1990, which was preferred by Tinplate Co. of India Ltd. and another preferred by the writ petitioner being Civil Appeal No. 1460/1990. In view of the ultimate decision deciding the controversy finally by the Hon'ble Supreme Court dated 22nd January, 1997, the petitioner sought refund of the deposited amount of Rs. 50 lacs with interest @ 15% per annum in the light of the interim order dated 7th February, 1989 passed in L.P.A. No. 71/1988R. The respondent-Union of India, Revenue, refused to make payment of interest and hence, writ petition has been filed by the petitioner. On 26th November, 2010, this Court observed that the amount, which was deposited with the Revenue, was deposited under the orders of the Court for grant of stay and it was associated with the condition of payment of interest and the amount has been refunded but inte....
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....n Bench of this Court has quantified the rate of interest @ 15% per annum, which has not been challenged by the Revenue and therefore, they cannot dispute the rate of interest now after the decision of Hon'ble Supreme Court. 8. Learned counsel for the petitioner also submitted that the respondents' contention that there was no statutory provision for payment of interest and therefore, they are not liable to pay interest, has been answered by Hon'ble Supreme Court in the case of Tata Refractories Ltd. & Ano. v. Sales Tax officer & Ors. reported in (2003) 1 SCC 65, wherein it has been held that even when there is statutory provision of payment of interest on the amount withheld by the Department/Revenue, rate of interest will be as ordered by the Court, may it be in the interim order and not according to statutory provision. Learned counsel for the petitioner also relied upon judgment of Hon'ble Supreme Court delivered in the case of Commissioner of Central Excise, Hyderabad v. ITC LTD. reported in (2005) 13 SCC 689 = 2005 (179) E.L.T. 15. However, it was a case wherein issue under consideration was whether the interest is payable in a case where payment is required to be made ....
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....High Court and in the case of Jyoti Limited, Baroda v. Union of India & Ano. - 1979 (4) E.L.T (J-546) (Guj.), learned Single Judge of Gujarat High Court have allowed interest on account of delayed refund of money by the Departments. 10. Learned counsel for the Revenue relied upon the decision taken in the meeting with the petitioner, wherein the respondents took the stand that firstly there is no statutory provision of payment of interest over the amount deposited by the petitioner in this case, secondly interest can be awarded according to the rate prescribed under Section 11BB of the Central Excise Act, 1944 and thirdly it can be at the most from the date of order passed by Hon'ble Supreme Court, if the petitioner is entitled to interest. 11. We considered the submissions of the learned counsel for the parties and perused the facts of the case as well as judgment relied upon by the parties. 12. Interest can be awarded on the money withheld by a party on the basis of either statutory provision of law or by virtue of contractual liability of payment of interest. In other case, the Court may award interest as damages to the aggrieved party on account of illegal ret....
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....in L.P.A. No. 71/1988R, wherein interim order dated 7th February, 1989, was passed, which we have already referred above and the Division Bench stayed the judgment of the learned Single Judge dated 19th August, 1988, with the condition that the Department will refund the deposited amount to the petitioner with interest @ 15% per annum, if the Department fails in L.P.A. So the condition of award of interest for the first time came into operation by the order dated 7th February, 1989. Ultimately L.P.A. No. 71/1988R was allowed by the Division Bench of this Court and therefore, Revenue was not supposed to repay the deposited amount and the interest over it in terms of the interim order and was entitled to recover more amount as the amount of Rs. l crore was not the total liability of the writ petitioner as has been admitted by the learned counsel for the petitioner that the amount of Rs. l crore was not the total liability. Hon'ble Supreme Court allowed Civil Appeal No. 1460/1990 preferred by the writ petitioner on 22-1-1997. Therefore, after 22-1-1997 there is no justification for the respondents to retain the money which they got by virtue of the order passed by this Court in the wr....
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....and therefore, retained the money illegally from 22-1-1997. So far as interest from 22-1-1997 is concerned, the petitioner is certainly entitled to interest over the deposited amount. 17. However, in the above facts of the case, when the petitioner deposited the amount in compliance of the order of this Court and to take benefit of the interim order, it cannot be said that the respondents recovered the amount illegally. This situation is peculiar in the facts of this case and may not be applied in all cases, where there may be absolutely illegal demand raised by the Department without any authority of law, which is found to be absolutely illegal by the court of law when challenged in the court of law. Here in this case, the petitioner succeeded in the first round of litigation before the learned Single Judge, but lost the battle in the second round before the Division Bench and ultimately succeeded in third round before the Supreme Court. Therefore, it cannot be said that the respondents had no legal right to raise the demand at the time when the position of law was not very clear because of the reason that ultimately the view taken by the respondent-Department was found to b....
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....d opinion that such general principles blankedy cannot be applied to the cases where Government or Revenue authority without any mala fide or oblique motive raises demand and recovers money from the citizens, which is not found to be by colourable exercise of power. In that situation, it is difficult to apply the above referred principle of law because of the presumption that the lawful authority acted fairly and legally and for the reason that the Revenue have no discretion in the matter of using the money recovered by it, which is available with any private persons/firm, company or any legal entity. The amount recovered by the Revenue and the Government authorities, etc., may not be utilized by them because of the restriction imposed by the statutory provisions as well as in view of limited power vested in those authorities, such amount are utilized for various welfare purposes also in the best public interest. The Government and such other authorities even, and normally cannot earn interest from the recovered amount. In that situation, the Court may look into the facts of each case for award of interest. At this juncture, we may make it clear that such compensation is quantified....