BOCHASANWASI SHREE AKSHAR PURUSHOTTAM SWAMINARAYAN SANSTHA vs. COMMISSIONER OF CUSTOMS, AHMEDABAD

TAXAP/526/2022HC GujaratGJHC24027782202208 September 2022Author: HONOURABLE MR. JUSTICE N.V.ANJARIA,HONOURABLE MR. JUSTICE BHARGAV D. KARIA23 pages
AI SummaryDismissed

What were the facts?

The assessee, Bochasanswasi Shree Akshar Purushottam Swaminarayan Sanstha, imported marble donated as a free gift for constructing the Akshardham Temple. The declared value was US$85 PMT, but the Assistant Commissioner enhanced it to US$300 PMT, raising a differential duty demand. After appeals and modifications regarding pre-deposit, the Commissioner (Appeals) rejected the appeal, leading to the encashment of a bank guarantee. The CESTAT allowed the appeal, directing reassessment at US$95 PMT plus freight and insurance. The Supreme Court dismissed Revenue's appeal. The assessee then sought refund of the pre-deposit along with interest. The Deputy Commissioner sanctioned the refund but denied interest, stating it wasn't relatable to Section 27(1) of the Customs Act. Subsequent orders from the Commissioner (Appeals) and CESTAT allowed interest on the pre-deposit. Revenue's appeal to the High Court was rejected. The assessee then claimed interest on the sanctioned interest, which was partially allowed by the Assistant Commissioner, who sanctioned Rs. 6,67,808/- at 6% per annum and rejected the balance claim of Rs. 44,42,943/-. The Commissioner (Appeals) and CESTAT upheld this rejection.

What did the High Court hold?

The Tribunal held that the rate of interest on the refund is to be 6% per annum, as prescribed by Notification No. 75/2003-Cus(N.T.) dated 12.09.2003, which is a statutory provision binding on the revenue. The Tribunal further held that the appellant is not entitled to interest on interest. This decision was based on the reasoning that there is no specific statutory provision in the Customs Act, 1962, or the Central Excise Act, 1944 (which are pari materia in this regard), that allows for the award of interest on interest. The Tribunal relied on the decision in International Industrial Cases Ltd., which held that interest on delayed payment of interest cannot be awarded for want of a specific provision. The Tribunal also clarified that the Supreme Court's decision in Sandvik Asia Ltd. was misinterpreted and did not direct payment of interest on interest but rather compensation for inordinate delay in refunding amounts including statutory interest. Therefore, the appeal was dismissed. No issue was expressly left undecided.

What were the issues?

1. Whether the rate of interest on the refund allowed should be 6% or 15% or any other rate? 2. Whether the Appellant is entitled to interest on the interest, on the refund amount allowed to the Appellant? Assessee's Contentions: The assessee contended that the rate of interest should be 15% or any other rate, and that they are entitled to interest on the interest. The judgment does not explicitly detail the assessee's arguments for these claims, but it implies they sought a higher rate of interest and interest on interest. Revenue's Contentions: The revenue contended that the rate of interest is prescribed at 6% per annum as per Notification No. 75/2003-Cus(N.T.) dated 12.09.2003, which is a statutory provision. They also argued, citing the CESTAT decision in Sun Pharmaceuticals Ltd., that interest on interest cannot be granted in the absence of a specific provision in the Act or Rules. The judgment records that the Assistant Commissioner rejected the claim for interest on interest based on this precedent.

Which sections of the Income-tax Act were involved?

Section 130,Section 27(1),Section 27A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/526/2022 ORDER DATED: 08/09/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 526 of 2022 ========================================================== BOCHASANWASI SHREE AKSHAR PURUSHOTTAM SWAMINARAYAN SANSTHA Versus COMMISSIONER OF CUSTOMS, AHMEDABAD ========================================================== Appearance: MR HARDIK P MODH(5344) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 08/09/2022

ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1.By this appeal preferred under section 130 of the Customs Act, 1962 (For short “the Customs Act”) the appellant has challenged the order No.A/12513 of 2021 dated 18.11.2021 passed by the Customs, Excise and Service Tax Appellate Tribunal (For short “the CESTAT”). 2.The appellant has raised the following C/TAXAP/526/2022 ORDER DATED: 08/09/2022 substanti

The order continues below.

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