- (1.) This appeal is directed against a judgment and order dated 26th November, 2012 passed by sister Indira Banerjee, J. The operative portion of the judgment is as follows: The writ application is disposed of by directing the respondent authorities to refund penalty and fine refundable to the petitioner forthwith and in any case within thirty days from the date of communication of the order. The value of the oil shall be assessed at the earliest and in any case within sixty days from the date of communication of this order after giving the petitioner an opportunity of hearing. The petitioner shall be entitled to interest on delayed refund at the rate of 9% per annum from the date of the Appellate Order. Aggrieved, by the judgment and order, the Revenue has come up in appeal.
(2.) Mr. Bharadwaj, learned Advocate appearing in support of the appeal, advanced the following submissions: (a) There is no question of payment of any interest in case of refund of fine or penalty because the same is not provided for in the statute. (b) The Customs Act being a special Act and being a complete Code and not contemplating payment of interest there is no question in such a case of any interest being allowed. (c) The Customs Act being a fiscal statute, equity has no manner of application. (d) Alternatively or in any event under Section 27A of the Customs Act, 1962, interest could be paid or could be directed to be paid only at the rate fixed by the Central Government by its notification in the official gazette. Section 27A provides as follows: Section [27A. Interest on delayed refunds.--if any duty ordered to be refunded under sub-section (2) of section 27 to an applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, [not below five percent] and not exceeding thirty percent per annum as is for the time being fixed [by the Central Government by Notification in the Official Gazette], on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty: Provided that where any duty ordered to be refunded under subsection (2) of section 27 in respect of an application under sub-section (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, till the date of refund of such duty. Explanation.--where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal (National Tax Tribunal) or any court against an order of the [Assistant Commissioner of Customs or Deputy Commissioner of Customs under sub-section (2) of section 27, the order passed by the Commissioner (Appeals), Appellate Tribunal [ National Tax Tribunal] or as the case may be, by the court deemed to be an order passed under that sub-section for the purposes of this section.]
(3.) The notification dated 12th September, 2003 provides for payment of interest at the rate of 6%. Therefore, the learned Trial Court erred in directing payment of interest at the rate of 9% per annum. In support of his submission he relied upon a judgment in the case of Union of India & Ors. v. Orient Enterprises & Anr., 1998 3 SCC 501. He drew our attention to paragraph 8 of the said judgment whereto the following views were expressed: In the present case also till the insertion of section 27-A in the Act by-Act 22 of 1995 there was no right entitling payment of interest on delayed refund under the Act. Such a right was conferred for the first time by the said provision, Act 22 of 1995 also inserted section 28-AA which provides for payment of interest on delayed payment of duty by a person who is liable to pay the duty. Thus at the relevant time there was no statutory right entitling the respondents to payment of interest on delayed refund and the writ petition filed by them was not for the enforcement of a legal right available to them under any statute. The claim for interest was in the nature of compensation for wrongful retention by the appellants of money that was collected from the respondents by way of customs duty, redemption fine and penalty. In view of the law laid down by this Court in Suganmal a writ petition seeking the relief of payment of interest on delayed refund of the amount so collected could not, in our opinion, be maintained. The decisions on which reliance has been placed by Shri Rawal were cases where the legality of the orders requiring payment of tax or duty were challenged and the High Court in exercise of its jurisdiction under Article 226 of the Constitution, while setting aside the said orders, has directed the refund of the amount so collected with interest. The direction for payment of interest in these cases was by way of consequential relief along with the main relief of setting aside the order imposing the tax or duty. Those cases stand on a different footing and have no application to the present case. The appeal is, therefore, allowed, the impugned judgment of the High Court is set aside and the writ petition filed by the respondents before the High Court is dismissed. No order as to costs.;