TaxTMI 
TaxTMI 
2007 (11) TMI 212
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....hs imposed by the Commissioner of Customs. The entire penalty was set aside by the Tribunal by its final order dt.13.5.94. b) The appellant filed a claim for return of the pre-deposit in Jan '97; after a lot of litigation, it was refunded by a cheque dt.9.7.02; the appellant claimed interest on the pre-deposit of penalty was which belatedly returned for period after 3 months from the date of filing the claim in Jan.'97 till the date of payment. c) The original authority rejected the claim for interest. The Commissioner (Appeals) by his impugned order held that the Customs Act did not empower the Departmental officers including Commissioner (Appeals) to grant interest on delayed payment of refund of pre-deposit of pen....
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.... the order of confiscation subsisted against the assessee. c) He also relied on the judgment of the Hon'ble Supreme Court in case of ITC Ltd. -2005 (179) ELT 15 (SC), wherein payment of interest on delayed refund @ 12% p.a. commencing from 3 months after final disposal of the dispute was ordered after taking note of the draft circular of the Board No.802/35/2004-CX, dt.8.12.04. He submits that the Board's circular dt.8.12.04 clearly envisages the liability of interest on pre-deposit which are not returned within the period of 3 months after the disposal of appeal in the assessee's favour. d) He also submits that the Supreme Court judgment in case of ITC Ltd. and Board's circular dt.8.12.04 only a clarification ....
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....the department and payable by the department in terms of specific provisions of statute. 6.3 The provisions relating to confiscation and penalty are penal in nature. If a person, on whom a penalty is imposed, does not pay immediately and pays, say after a few years, as of now, the department has no powers to collect of interest on such delayed payment of penalty. Reciprocally, penalty imposed on a person was paid either fully or partly by that person and the same was set aside or reduced ultimately resulting in refund of amount of penalty he merely gets the amount of penalty without interest. As rightly held by the Commissioner (Appeals), there is no provision for grant of penalty under the Custo....
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.... dealing with the interest on redemption fine to be refunded while the former was concerned about interest on deposit of duty. We conclude that no interest is payable on redemption fine and penalty while refunding the same in pursuance of an order of a higher judicial forum as observed by the Supreme Court in Orient Enterprises' case. The case of interest on consequential refund of duty is covered by the decision in Sheela Foam case. There is no conflict between these decisions. We hold accordingly." 7.3 The Section 27A specifically refers to "interest payable on duty". There is no provision of law which provide for payment of interest either by the department in the event of refund or by the parties on whom penalty is imposed. ....