TaxTMI 
TaxTMI 
2019 (11) TMI 1197
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....nt paid demand of duty along with interest and 25% duty as penalty within 30 days of receipt of the order. On 6.5.2014 and challenged the order of the Commissioner. But on 29.12.2016, the Tribunal set aside the order of the Commissioner dt.31.3.3014.The appellant filed refund claim of Rs. 27,47,172/- along with interest on 3.3.3017. On 20.06.2017, the refund was sanctioned by the adjudicating authority but the claim of interest was rejected. The claim of the appellant is that the appellant is entitled for interest from the date of deposit of the amount till the refund of principal amount and the Commissioner (Appeals) also did not accept that claim of the appellant. Therefore, the appellant is before me. 4. The facts of the case in appeal No.E/60965/2019 are that a show cause notice was issued to the appellant on 4.5.2012 for demand of Rs. 20,97,45,645/- from the appellant and on 26.4.2013, the demand of Rs. 37,22,164/- was confirmed along with interest. On 20.5.2013, the appellant deposited the amount of Rs. 37,22,164/- and challenged the order of the Commissioner. On 7.4.2017, the adjudication order was set aside by this Tribunal and cross appeal filed by the Revenue was....
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....d (supra) is misplaced on the following grounds:- (a) The delay in the relied upon case was for a period ranging 12 to 17 years, whereas, in the case in hand there was no delay in sanctioning the refund (b) Section 244 (1A) of the Income Tax Act, referred in the Sandvik judgement and relied in the Berger Paints india Ltd. has a provision of payment of interest from the date of deposit. Therefore, deciding the case in hand, of Central Excise law, proviision of Income Tax law would be misnomer and the Revenue would suffer. (c) Further the matter pertains to the advance tax paid by the assessee and later on the refund arose after the assessment was done by the Income Tad Officers. Whereas in the case in hand, the facts are totally different inasmuch as the duty of excise has been deposited by the appellants after proper adjudication of the demand notice. The demand was made on the basis of non-availability of exemption Notification No.50/2003 on the product manufactured by the appellants, that being "Red Lead Oxide". The adjudicating authority adjudged the issue in favour of department, but dropped the demand for the extended period of limitation. In a....
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....d. is with regard to the Incometax Act and as per Section 2(29BA) of the Income-tax Act, 1961 the term "manufacture" with its grammatical variation means a change in non-living physical object or article - (a) resulting in transportations of object or article or things into a new and distinct object or article or having a distinct name, character and use; or (b) bringing into existence of a new distinct object or article or thing with different chemical composition or integral structure. 28. On going through the above definition of the manufacture, the test laid down by the Apex Court in the case of Delhi Cloth and General Mills Co. Ltd. (supra) support the definition that a new and different article must emerge having a distinct name, character and use. Therefore, the definition of manufacture as Section 2(f) of the Central Excise Act, 1944 is pari materia to definition of manufacture in Income-tax Act as per Section 2(29BA) of the Income-tax Act, 1961. 29. Therefore, the decision in the case of M/s. Cynamid India Ltd. is applicable to the facts of this case wherein the Apex Court has observed as under : 5. The High Court has answered t....
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.... Therefore, the argument advanced by the Ld.AR is turned down and not acceptable. 12. He further made reliance on the decision of Hon‟ble Apex Court in the case of ITC Ltd.(supra). 13. I have gone through the case laws relied upon by the Ld.AR. In the case of ITC Ltd.(supra), the decision of Hon‟ble Apex Court has been delivered on 02.12.2004 whereas the decision in the case of Sandvik Asia Limited (supra) delivered on 27.1.2006. Therefore, the latest decision of the Hon‟ble Apex Court is having persuasive value. In all the other cases, (referred to by Ld. AR) have not considered the decision in the case of Sandvik Asia Limited (supra). 14. I have gone through the decision in the case of Sandvik Asia Limited (supra), wherein the section 243 dealt with situation of interest on delayed refund. 15. For better appreciation, section 243 of the Income Tax Act, 1961 reproduced as under:- "243. Interest on delayed refunds- (1) if the Income tax officer does not grant refund- (a) In any case where the total income of the assessee does not consist solely of income from interest on securities or dividend, within three months from the end of the ....
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....entitled to interest under Sections 214 and 244 of the Act as held by the various High Courts and also of this Court. In the instant case, the appellant's money had been unjustifiably withheld by the Department for 17 years without any rhyme or reason. The interest was paid only at the instance and the intervention of this Court in Civil Appeal No. 1887 of 1992 dated 30.04.1997. Interest on delayed payment of refund was not paid to the appellant on 27.03.1981 and 30.04.1986 due to the erroneous view that had been taken by the officials of the respondents. Interest on refund was granted to the appellant after a substantial lapse of time and hence it should be entitled to compensation for this period of delay. The High Court has failed to appreciate that while charging interest from the assesses, the Department first adjusts the amount paid towards interest so that the principle amount of tax payable remain outstanding and they are entitled to charge interest till the entire outstanding is paid. But when it comes to granting of interest on refund of taxes, the refunds are first adjusted towards the taxes and then the balance towards interest. Hence as per the stand that the Dep....
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....the statute 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. 48. This is the fit and proper case in which action should be initiated against all the officers concerned who were all in charge of this case at the appropriate and relevant point of time and because of whose inaction the appellant was made to suffer both financially and mentally, even though the amount was liable to be refunded in the year 1986 and even prior to. A copy of this judgment will be forwarded to the Hon'ble Minister for Finance for his perusal and further appropriate action against the erring officials on whose lethargic and adamant attitude the Department has to suffer financially. 49. By allowing this appeal, the Income-tax Department would have to pay a huge sum of money by way of compensation at the rate specified in the Act, varying from 12% to 15% which would be on the high side. Though, we hold that the Department i....
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....red and ordered 12% interest, and further held that when the High Court directed the respondents to pay interest to the appellant in terms of the circular dated 8-12-2004 on the pre-deposit of the delayed refund within two months, it has to be construed that, the Court meant the rate of interest which was awarded by the Supreme Court in the case of Commissioner of Central Excise v. ITC Ltd., which was the rate quantified by the Supreme Court in the absence of any statutory provisions in the Act in question. Even though various other judgments of various High Courts and the various Tribunals was brought to my notice awarding 15% interest, in view of the directions contained in the judgment of the Apex Court in Commissioner of Central Excise v. ITC Ltd. (supra) rate of interest is to be confined to 12%. I am also bound to follow the same. Therefore the interest that is liable to be paid by the respondents as per the directions of this Court in Ext. P12 judgment is fixed at 12% per annum. 15. Taking note of the compendious circumstances and reckoning the law, there will be a direction to the respondents to pay interest to the petitioner at 12% from the date of expiry of three....