The Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)has held that interest can’t be allowed on Seized Currency notes on the release.
On the premises of Matta Paints and Hardware Store, the appellants were searched, under the intelligence against the main notice M/s. Real Paint, on 13.09.2011 on the allegations that the appellant is engaged in the sale of goods manufactured and clandestinely cleared by said M/s. Real Paint. During said search goods worth Rs.1,01,21,609/- along with several Rs. 12,53,500/- Indian currency (INR) was seized by the Anti Evasion team by seizure memo dated 05.03.2012.
The sum so seized was got fixed in a deposit with Syndicate Bank on 05.03.2012 itself. The said currency along with the goods seized was proposed to be confiscated vide common show cause notice No.579 dated 13.3.2012. The proposal was confirmed vide Order-inOriginal No. 13/2018 dated 22.5.2018.
The appellant has still challenged the same in the present appeal as his request for sanction of interest earned by the Revenue from the date of seizure/ deposit of aforesaid sum in fixed deposit till the refund was granted to the appellant has not been considered.
The currency in question has been the appellant’s property. He cannot be deprived of the same and is entitled to benefits arising out of the said property. Hence interest accrued on the amount in question during the period it was in fixed deposit is the property of the owner of the amount i.e. the appellant herein.
A Coram of Dr Rachna Gupta, member(judicial) observed that since the amount in question was not the amount of pre-deposit as required under section 35F of the Central Excise Act, section 35FF has been wrongly invoked by Commissioner (Appeals). The Commissioner (Appeals) has committed an error while holding that since there is no provision to grant interest on the seized currency notes while refunding the said currency, the interest from the date of seizure cannot be granted.
Since the order of confiscation, and the impugned currency stand set aside, the Department had no authority to retain the said amount nor any authority to retain the interest accrued on the said amount. Had the amount in question been fixed by the appellant himself, over a period of 9 years, he would have earned a handsome amount of interest. Retention of said interest with the Department will rather be the unjust enrichment of the Department and will amount to a deprivation of the appellant of his property, currency notes being the property in terms of Article 300 A of the Constitution of India.
The Court set aside the order under challenge and the appellant is held entitled to a refund of interest on the principal amount at the rate of 12% from the date of its seizure.
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