Custom, Excise & Service Tax Tribunal
M/S.Diamond Beverages Pvt.Ltd vs The Commisioner Of Central Excise - Kol ... on 29 January, 2020
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
KOLKATA
REGIONAL BENCH - COURT NO.2
Excise Appeal No.540 of 2009
(Arising out of Order-in-Appeal No.04/Kol.VI/2009 dated 27.08.2009 passed by
Commr. of Central Excise (Appeals), Kolkata)
M/s Diamond Beverages Pvt. Ltd.
P-41, Taratala Road, Kolkata-700088
Appellant
VERSUS
CCEx., Kolkata VI
180, Shantipally, Rajdanga Main Road, Kolkata 700107
Respondent
APPERANCE :
None for the Appellant Shri S.Mukhopadyyay, Authorized Representative for the Respondent CORAM:
HON'BLE MR. P.K.CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR.P.VENKATA SUBBA RAO, MEMBER (TECHNICAL) FINAL ORDER NO...75221/2020 DATE OF HEARING : 29.01.2020 DATE OF DECISION : 29.01.2020 PER P.V.SUBBA RAO :
This appeal is filed by the appellant against the Order-in-Appeal No.04/Kol.VI/2009 dated 27.08.2009 passed by Commissioner of Central Excise (Appeals), Kolkata.
2. None appeared on behalf of the appellant. As the matter is very old pertaining to 2009 and the issue is in a narrow compass, the matter has been taken up for decision even in the absence of the appellant.
3. Heard the Ld.D.R. for the Revenue and perused the records.
4. The appellant had been sanctioned refund as well as interest on the refund as applicable under Section 11BB of the Central Excise Act, 1944. The appellant also sought an interest on the interest, which has been rejected by the first appellate authority in the impugned order.
2 Excise Appeal No.540/09The relevant portion of the impugned order at Page 4 in Para 4, is reproduced below :
"4. I have gone through the materials on record, the appeal petition and the records of personal hearing. The Commissioner (Appeals) in his Order-in-Appeal dated 25.03.2008 has ordered as under :
'in view of the above, the impugned order is set aside and Lower Authority is directed to refund the interest amount paid.' Accordingly, the Assistant Commissioner, Central Excise, Taratala IV Division, in compliance of the above Order-in-Appeal dated 25.03.2008 sanctioned the refund of interest of Rs.1,27,340.00. I find that the Order-in-Appeal dated 25.03.2008 has not allowed refund of "interest on interest". I do not find any flaw in the order dated 11.06.2008 of the Assistant Commissioner. The present appeal has not merit and therefore stands dismissed."
5. The relevant claim in the Appeal Memorandum in Sl.No.14, is "to quash and/or set aside the order appealed against, and refund the Interest on Interest". The grounds of appeal are as follows :
(i) The Commissioner (Appeals) in the said order has further observed that none of the ingredients namely, suppression of fact, willful mis-statement with intent to evade payment of duty was present.
If the said ingredients are not present the provision of Section 11AB of the Act is not applicable.
(ii) It is settled that interest becomes due after three months of becoming eligible for refund. If such interest is not paid interest on interest is payable.
(iii) The Commissioner of Central Excise, Appeal II, vide his Order-in-Appeal No.14/Kol.VI/2008 dated 25.03.2008 discussed regarding our claim i.e. interest on interest with various judgements and lastly directed to lower authority to refund the interest.
(iv) The lower authority passed by the Assistant Commissioner of Central Excise, Taratala-IV Division vide his Order-in-Original No.R-
3 Excise Appeal No.540/0972/AC/Tara-IV/Kol-VI/2008 dated 11.06.2008 refunded the interest of Rs.1,27,340/- only but not the interest on interest.
(v) We have also filed the appeal before the Commissioner of Central Excise, Appeal Kolkata II for payment of interest on interest, who without going through the various judgements of CESTAT dismissed the appeal vide his order No.04/Kol.VI/2009 dated 27.08.2009.
(vi) For that further and in any event and without prejudice to the aforesaid, the Commissioner of Central Excise, Appeal, Kolkata II failed to appreciate that the appellant all along acted bonafide in the matter and there had been no dishonest or willful disregard of any statutory provision on its part.
(vii) For that the order appealed against is otherwise erroneous on facts and/or in law. The appellants craves leave to add to alter, amend or modify the grounds taken herein.
6. Section 11B of the Central Excise Act, 1944 provides for refund of duty paid. If the refund is not sanctioned within prescribed time limit, a provision has been made under Section 11BB for payment of interest. However, there is no provision for payment of interest on such interest if the interest itself was paid belatedly. The question of law which arises is when there is no explicit provision for payment of interest on interest, whether it can be paid. This question of law was decided by Three Member Bench of the Apex Court in the case of Commissioner of Income Tax, Gujarat Vs. Gujarat Fluoro Chemicals : 2013 (296) ELT 433 (SC), in which, a batch of SLP were disposed off. Although the case pertains to the income tax, the question of law is identical to the present one inasmuch as where the interest on the refund is paid belatedly, whether the assessee is entitled to interest on such interest, in the absence of any explicit provisions of law for such payment. This issue has been decided by the Hon'ble Apex Court in negative. Paras 7,8 & 9 of this judgement, are reproduced below :
"7. As we have already noticed, in Sandvik case (supra) this Court was considering the issue whether an assessee who is 4 Excise Appeal No.540/09 made to wait for refund of interest for decades be compensated for the great prejudice caused to it due to the delay in its payment after the lapse of statutory period. In the facts of that case, this Court had come to the conclusion that there was an inordinate delay on the part of the Revenue in refunding certain amount which included the statutory interest and therefore, directed the Revenue to pay compensation for the same not an interest on interest.
8. Further it is brought to our notice that the Legislature by the Act No. 4 of 1988 (w.e.f. 1-4-1989) has inserted Section 244A to the Act which provides for interest on refunds under various contingencies. We clarify that it is only that interest provided for under the statute which may be claimed by an assessee from the Revenue and no other interest on such statutory interest.
9. With the aforesaid clarification we now refer back all the matters before a Two Judge Bench of this Court to consider each case independently and take an appropriate decision one way or the other."
7. Respectfully following the judgement of the Larger Bench of the Hon'ble Supreme Court, we hold that the appellant is not entitled for interest on interest and there is no infirmity in the impugned order rejecting such a claim for interest on interest.
8. In view of the above, the impugned order is upheld and the appeal is rejected.
(Dictated and pronounced in the open court)
(P. K. Choudhary)
Member (Judicial)
(P.V.Subba Rao)
mm Member (Technical)