COMMISSIONER OF CUSTOMS, LUDHIANA vs. M/S H.L.G. TRADING

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CUSAP/8/2018HC Punjab & HaryanaPHHC01079923201821 January 2019Author: MR. JUSTICE AJAY KUMAR MITTAL,MRS. JUSTICE MANJARI NEHRU KAUL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeals filed by the Commissioner of Customs, Ludhiana. The dismissal was based on the principle laid down by the Supreme Court in 'Commissioner of Income Tax Vs. Dhanalekshmi Bank Ltd., [2015] 373 ITR 526 (SC)', where appeals with a low tax effect were dismissed without delving into the merits of the case. The Court clarified that this dismissal should not be construed as an affirmation of the CESTAT's order on merits. The legal issue raised by the Revenue was explicitly left open to be adjudicated in an appropriate future case. Therefore, no specific finding was made on the entitlement to interest or the quantum thereof.

What were the facts?

The Commissioner of Customs, Ludhiana (appellant) filed appeals against the order of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT). The respondent, M/s. H.L.G. Trading, had claimed interest of ₹7,74,981/- on delayed refunds. The Assistant Commissioner of Customs allowed interest of ₹3,09,988/- and rejected the remaining claim of ₹4,64,983/-. The CESTAT's order, which is under challenge, is not detailed in terms of its findings but led to the present appeals by the Revenue. The total tax effect in these eight appeals is ₹3,09,998/-.

What were the issues?

1. Whether the Tribunal erred in its decision regarding the entitlement of the respondent to claim interest on delayed refunds, and if so, to what extent? (Question of law and fact, concerning provisions related to interest on refunds under the Customs Act, 1962). Contentions: Assessee (Respondent): The judgment does not record any specific contentions made by the respondent before the High Court. However, their claim for interest on delayed refunds was the basis of the dispute. Revenue (Appellant): The Revenue is challenging the CESTAT order. The judgment does not explicitly detail the Revenue's arguments before the High Court, but their appeal implies disagreement with the CESTAT's decision or the underlying principles that led to it. The Revenue relied on the Supreme Court's decision in 'Commissioner of Income Tax Vs. Dhanalekshmi Bank Ltd., [2015] 373 ITR 526 (SC)' to dismiss the appeals due to low tax effect.

Which sections of the Income-tax Act were involved?

130(1)

AI-generated summary — verify with the full judgment below

CUSAP-8-2018 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CUSAP-8-2018 (O&M) Decided on: 21.01.2019 Commissioner of Customs, Ludhiana .... Appellant

Versus M/s. H.L.G. Trading ..... Respondent CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL

HON'BLE MRS. JUSTICE MANJARI NEHRU KAUL Present: Mr. Amit Goyal, Advocate for the appellant. Mr. Deepak Gupta, Advocate for the respondent. **** AJAY KUMAR MITTAL

, J (ORAL)

This order shall dispose of CUSAP Nos. 8 to 15 of 2018, as according to the learned counsel for the appellant, the issue involved in these appeals is identical. However, the facts are being extracted from CUSAP No. 8 of 2018. 2. In this appeal filed under Section 130(1) of the Customs Act, 1962 challenge is to the CESTAT Order No.A/61265 of 2017 dated 13.07.2017 (Annexure P-3) passed by the Customs, Excise & Service Tax Appellate Tribunal, Sector-17, Chandigarh in Appeal No.60094 of 2017. 3. The respondent had claimed the interest of `774981/- as per details given below:- S.No. Refund File No. Date of Receipt Refund Claimed Refund Order/dt. Amount Sanctioned Total no. of days after deducting 90 days Interest @ 15% DINESH KUMAR 2019.01.24 17:20 I attest to the accuracy and integrity of this document

CUSAP-8-2018 (O&M) 2 1. 1032 08.10.2014 250045 2. 1090 20.10.2014 175194 3. 1140 31.10.2014 845023 4. 1189 14.11.2014 172641 5. 1419 07.01.2015 1483735 1113/AC/CFS/CRC /Ldh/2016 dt. 31.08.2016 250045 603 61963 175194 590 42478 845023 579 201069 172641 560 39731 881364 511 185075 6. 637 30.06.2015 452758 1029/AC/CFS/CRC /Ldh/2016 dt. 22.08.2016 452758 316 58797 7. 702 16.07.2015 1254327 1114/AC/CFS/CRC /Ldh/2016 dt. 31.08.2016 1165395 320 153257 8. 1087 23.10.2015 372556 1028/AC/CFS/CRC /Ldh/2016 dt. 22.08.2016 372556 213 32611 Total 774981

4.

However, the Assistant Commissioner of Customs accepted the interest payable against delayed refunds amounting to `3,09,988/- and rejected the remaining balance claim of `4,64,983/-. The details of which are as follows:- S.No. Refund File No. Date of Receipt Refund Claimed Refund Order/dt. Amount Sanctioned Total no. of days after deducting 90 days Interest @ 6% 1. 1032 08.10.2014 250045 2. 1090 20.10.2014 175194 3. 1140 31.10.2014 845023 4. 1189 14.11.2014 172641 5. 1419 07.01.2015 1483735 1113/AC/CFS/CRC /Ldh/2016 dt. 31.08.2016 250045 603 24785 175194 590 16991 845023 579 80428 172641 560 15892 881364 511 74035 6. 637 30.06.2015 452758 1029/AC/CFS/CRC /Ldh/2016 dt. 22.08.2016 452758 316 23519 7. 702 16.07.2015 1254327 1114/AC/CFS/CRC /Ldh/2016 dt. 31.08.2016 1165395 320 61303 8. 1087 23.10.2015 372556 1028/AC/CFS/CRC /Ldh/2016 dt. 22.08.2016 372556 213 13045 Total 309998 DINESH KUMAR 2019.01.24 17:20 I attest to the accuracy and integrity of this document

CUSAP-8-2018 (O&M) 3 The tax effect involved in these eight appeals is only `3,09,998/-. In view of the order of the Apex Court in 'Commissioner of Income Tax Vs. Dhanalekshmi Bank Ltd., [2015] 373 ITR 526 (SC)', where the Supreme Court had dismissed the appeal without going into the merits of the appeal due to low tax effect leaving the question of law open, the present appeals are dismissed. It is, however, clarified that dismissal of the appeals shall not be taken to be affirmation of order of the Tribunal on merits. Further, the legal issue as claimed by the revenue is being left open to be adjudicated in an appropriate case. (AJAY KUMAR MITTAL) JUDGE (MANJARI NEHRU KAUL) 21.01.2019 JUDGE Dinesh

Whether speaking/reasoned : Yes/No

Whether Reportable : Yes/No DINESH KUMAR 2019.01.24 17:20 I attest to the accuracy and integrity of this document

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