AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (5) TMI 74
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....issioner] while deciding the refund claimed by the appellant of an amount of Rs. 1,23,53,68,897/- with interest. This amount included an amount of Rs. 90,84,11,091/- deposited by the appellant towards the pre-deposit at the time of filing the earlier before this Tribunal and an amount of Rs. 1,13,69,57,806/- deposited by the appellant pursuant to the directions contained in the interim order dated 03.01.2019 of the Supreme Court in Civil Appeal No. 1832 of 2018 filed by the appellant. The Assistant Commissioner sanctioned the amount of Rs. 1,23,53,68,897/- but denied interest to the appellant. The appellant had, therefore, filed an appeal before the Commissioner (Appeals) to claim interest on the said amount. The Commissioner (Appeals) granted interest to the appellant on the amount of pre-deposit but denied payment of interest to the appellant on the amount deposited by the appellant pursuant to the directions issued by the Supreme Court. 3. This appeal has, therefore, been filed with a prayer that a direction be issued to the respondent to pay interest to the appellant on the amount of Rs. 1,13,69,57,806/- deposited by the appellant in terms of the directions contained in the ....
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....This application came up for orders before the Supreme Court on 03.01.2019 and the order passed is reproduced below: "Having heard the learned counsel for the applicant and the learned counsel for the Revenue the prayer made in the I.A. (No.169351/2018) is allowed. The applicant (M/s Nikon India Pvt. Ltd.) in Civil Appeal No.1832 of 2018 is allowed to deposit amount of Rs.1,13,69,57,806/-) (Rupees One hundred and thirteen crore Sixty Nine lakh Fifty Seven thousand Eight hundred and Six) with the respondent within two weeks from today subject to the condition that the said amount will be refunded to the appellant/applicant forthwith with applicable interest in the event of the appeal being allowed. I.A. is disposed of in the above terms." (emphasis supplied) 9. Pursuant to the aforesaid direction of the Supreme Court, the appellant deposited the said amount before the department on 15.01.2019. Ultimately, the Supreme Court, by judgment dated 09.03.2021, allowed the appeal filed by the appellant and set aside the entire demand of duty, interest and penalty. 10. The appellant thereafter, by a letter dated 27.05.2021 addressed to the Assistant Commissioner cl....
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....om date of deposit till date of refund in terms of Section 129EE." (emphasis supplied) 14. In respect of the amount deposited by the appellant pursuant to the directions of the Supreme Court, the Commissioner (Appeals) after reproducing the order dated 03.01.2019 passed by the Supreme Court on the interlocutory application filed by the appellant, denied interest for the following reasons: "5.4 From the above note that the Hon'ble Supreme Court allowed the Appellant to deposit Rs. 1,13,69,57,806/" subject to the condition that the said amount will be refunded to Appellant forthwith with applicable interest in the event of the appeal being allowed". The Appeal was allowed by the Hon'ble Supreme Court 09.03.2021, therefore the amount of Rs. 1,13,69,57,806/- deposited by the Appellant becomes refundable with the Applicable interest. 5.4 In respect of Rs. 1,13,69,57,806/- which was paid on 15.01.2019 pursuant to the Hon'ble Supreme Court's Order. I note that the Order dated 03.01.2019 passed by Hon'ble Supreme Court on I.A. No. 169351 of 2018 in C.A. No. 1832 filed by the Appellant reads as under. From the above I note that the Hon'ble Supreme Co....
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.....L.T.522(Guj.)]; and (iii) Deposits made before the Supreme Court can only be characterized as pre-deposits under section 131 of the Customs Act which relates to payment of any dues to the government arising as a result of an order under section 129B(1) of the Customs Act. To support this contention, learned counsel placed reliance on the judgment of the Supreme Court in the Daily Thanthi vs Commissioner of Customs (Appeals) and Ors. [2021(376)ELT615(Mad.)] 17. Shri P.R.V. Ramanan, learned special counsel appearing for the department, however, supported the impugned order and made the following submissions: (i) It is clear from the refund application filed by the appellant that section 27(1)(b) of the Customs Act was invoked. The section refers to 'duty' as distinct from-pre deposit under section 129EE of the Customs Act; (ii) Even in the letter enclosing the refund claim, the appellant claimed the amount of Rs. 1,13,69,57,806/- as differential duty; (iii) The refund application could have been filed only under section 27 of the Customs Act as was held by the Supreme Court in Mafatlal Industries Ltd vs Union of India [1996(12)TMI50-Supreme Cou....
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....lowed. 20. It is not in dispute that the appellant deposited the said amount within the time granted by the Supreme Court. The Supreme Court, ultimately, by judgment dated 09.02.2021, allowed the Civil Appeal filed by the appellant and set aside the entire demand of duty, interest and penalty. 21. The appellant then submitted a letter dated 27.05.2021 to the Assistant Commissioner of Customs for grant of refund of Rs. 1,23,53,68,897/- with interest. The relevant portion of the communication is reproduced below: "5. The appeal of the Applicant was disposed by the Hon'ble CESTAT by Final Order 5844658450/2017 dated 19.12.2017. The decision of the Hon'ble CESTAT confirmed the demand of duty, interest, and penalty of the OIO. The Applicant was allowed relief on the portion where it had claimed exemption for payment of education cess and secondary and higher education cess. 6. The Applicant preferred an appeal against the CESTAT order before the Hon'ble Supreme Court of India on 10.03.2018. After admission of the appeal before the Hon'ble Supreme Court, the Applicant had filed an Interlocutory Application No. 169351 of 2018 on 26.11.2018. In this ....
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....ounts have been shown by the Applicant as "receivables in their books of account. This has also been certified by the letter dated 25 May,2021 issued by an independent charted accountant. Copy of the CA's certificate and relevant extracts from the balance sheet are enclosed herewith as Annexure-6. Thus, the deposit made by the applicant has not been passed on. Therefore, the doctrine of unjust enrichment will have no application in the present case. 13. It is our request that such refund and applicable interest be processed forthwith as per the directions of the Hon'ble Supreme Court in its order dated 03.01.2019 and in any case no later than 15 days from this application as per Circular No. 984/08/2014-CX dated 16.09.2014. Should any further documents be required by you, kindly let us know, we shall be happy to provide the same. Form-A required for refund is filled and attached herewith." (emphasis supplied) 22. The appellant clearly stated that in terms of the interim order dated 03.01.2019 of the Supreme Court and the final judgment dated 09.03.2021, the appellant became entitled to refund of the amount with applicable interest till the date such refund wa....
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....t has been allowed by the Supreme Court by judgment dated 09.03.2021 and, therefore, the amount deposited by the appellant pursuant to the directions contained in the interim order dated 09.03.2021 of the Supreme Court, had to be refunded forthwith to the appellant with applicable interest and on receipt of such information, the department had to comply with the directions of the Supreme Court. 27. In this connection, it would be pertinent to refer to the decision of the Supreme Court in Tata Refractories, wherein a similar interim order dated 15.03.1995 passed by the High Court in a writ petition came up for interpretation. The relevant portion of the interim order that was passed by the High Court is reproduced below: "... In the event the petitioner succeeds in the second appeal, then the Sales Tax Authorities would refund the amount with interest at the rate of 18 per cent per annum. The writ application is disposed of." 28. The writ petition was, ultimately, allowed. The writ petitioner, however, instead of asking the respondent State to repay the amount deposited, filed an application under the provisions of the Orissa Sales Tax Act for refund of the amount. Th....
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....Court, the appellants again approached the High Court in writ petition in OJC No. 11998 of 2000 wherein the High Court taking a very narrow view of the matter held that the appellant is entitled only to the interest that was permissible under Section 14 of the Act. 7. It is to be noted that the order of the High Court in the earlier writ petition, namely, OJC No. 1200 of 1995 was made by the High Court in the exercise of its power under Articles 226 and 227 of the Constitution of India wherein while directing the appellants to deposit the amount quantified therein, the High Court also issued a direction to the respondent State that it should refund the amount with interest at the rate of 18% per annum in the event of the appellants succeeding in the second appeal. This order is definitely not one made under the provisions of the Act. The respondent State which took benefit of the said order and retained the amount deposited by the appellant, cannot now be permitted to say when it comes to refund the direction issued by the High Court in its order dated 15-3-1995 will not be binding on it and it is only the provisions of the statute that will bind. As noted above, it is not....
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....ovisions of the Orissa Sales Tax Act, it will not mean that the provisions of the said Act would apply, and it is the interim order of the High Court that will prevail. 31. It is, therefore, clear from the aforesaid decision of the Supreme Court in the Tata Refractories Ltd that the amount had to be forthwith refunded to the appellant in terms of the directions of the Supreme Court contained in the interim order dated 03.01.2019 and section 27 of the Customs Act cannot be made applicable by the department. Interest was, therefore, not required to be paid under section 27A of the Customs Act. The amount and the interest had to be refunded in terms of the directions of the Supreme Court in the Civil Appeal that was filed by the department. 32. The department is also not justified in contending that the amount deposited by the appellant pursuant to the interim order passed by the Supreme Court should be treated as 'duty'. 33. In this connection, reference could be made to the decision of the Gujarat High Court in Ghaziabad Ship Breakers. The Gujarat High Court made it clear that any amount deposited during the pendency of an appeal before the High Court or the Supreme Court w....
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....alls under Chapter XV under the heading Appeals. Chapter XV of the Act is comprised of various provisions from Section 128 to Section 131C of the Act. Section 130 of the Act which provides for appeal to High Court and Section 130-E of the Act which provides for appeal in Supreme Court also fall under Chapter XV. Thus, an appeal before the Supreme Court would also be an appeal under the said Chapter as envisaged under Section 129E of the Act. Thus, any amount deposited during the pendency of an appeal before the High Court or the Supreme Court would also be by way of deposit under Section 129E of the Act and has to be treated accordingly. 9. Adverting to the facts of the present case, it is an undisputed position that the amount in question had been deposited by the respondent during the pendency of the appeal before the Supreme Court. In the circumstances, it is apparent that the amount so deposited would squarely fall within the ambit of Section 129-E of the Act and has to be treated as pre-deposit. Thus, the contention raised on behalf of the appellant that the amount has been paid by way of duty and not pre-deposit, being contrary to the provisions of section 129E of th....
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....decisions of the Gujarat High Court in Ghaziabad Ship Breakers and of the Madras High Court in Daily Thanthi have been set aside or have been distinguished. The proposition of law laid down in these two decisions would, therefore, have to be considered while deciding the issue raised in this appeal. Thus any amount deposited during the pendency of the Civil Appeal before the Supreme Court cannot be treated as amount paid towards duty. 39. Learned special counsel appearing for the department also contended that when the Supreme Court directed that the amount will be refunded to the appellant forthwith with applicable interest in the event of the appeal being allowed, the department had to examine both the issues, namely, whether interest at all would be paid and if so, then at what rate. 40. This submission of the learned special counsel appearing for the department cannot be accepted. A plain reading of the interim order of the Supreme Court leaves no manner of doubt that the directions of the Supreme Court that the amount should be refunded forthwith with applicable interest can only mean that the appellant would be entitled to interest which would be at the applicable rate.....