Customs, Excise and Gold Tribunal - Delhi
Mothersons Sumi Systems Ltd. vs Cce on 30 August, 2006
Equivalent citations: 2006(113)ECC179, 2006ECR179(TRI.-DELHI), 2007(208)ELT209(TRI-DEL), 2007[5]S.T.R.16
ORDER
S.S. Kang, Vice President
1. Heard both sides.
2. The appellant filed these appeals against the common impugned order whereby the claim of the appellant in respect of refund of interest paid by them was rejected on the ground that there is no provision under the Central Excise Act or Rules for refund of the interest.
3. The brief facts of the case are that the appellants are engaged in the manufacture of excisable goods and were working under the Modvat scheme. Certain inputs on which credit has been taken were transferred to their another unit and the duty was paid on the basis of valuation arrived at under Rule 8 and 9 of Central Excise Valuation Rules 2000. The amount was paid along with interest under protest. Subsequently, in pursuance to the Board's Circular dated 1.7.02 which clarifies the position regarding the credit in respect of the inputs transferred to the other unit on stock transfer basis. The appellant filed refund claims in respect of the excess duty paid and the interest. The adjudicating authority as well as Commissioner (Appeals) held that the appellants are entitled for the amount, which was paid in excess, however, their claim is hit by the principles of unjust enrichment This portion of the order is not being challenged by the appellant.
4. In the impugned order, the claim of the appellant regarding refund of interest was rejected on the ground that there is no provision under Central Excise Act and Rules regarding refund of interest.
5. The contention of the appellant after relying upon the decision of the Tribunal in the case of Collector of Customs v. Garden Silk Mills Ltd. and Gemini Steel Tubes Ltd. v. CCE reported In 2006 (194) ELT 88 is that even though interest is not part of the duty but when the interest has been collected, when it is not to be recovered, that is to be refunded under the normal law. The contention is that as the interest was not payable by the appellant (sic) therefore, the appellants are entitled for the amount of Interest paid.
6. The contention of the Revenue is that all the refund claims are subject to the principles of natural justice, The Revenue relied upon the decision of Hon'ble Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd. v. CCE .
7. In this case, the appellants are only disputing the rejection of claim in respect of interest paid by them. I find that the Tribunal in case law relied upon by the appellant held that even though interest is not part of the duty but when the Interest has been collected, when the interest has been collected, when it is not to be recovered that is to be refunded to the assessee. The Tribunal held that anywhere any amount is wrongly collected, the department cannot refuse refund on the ground that it is not provided under the statutory provisions of the refund. In view of the above decision of the Tribunal, the appellant's claim for the refund is maintainable. However, in view of the decision of Hon'ble Supreme Court in case law relied upon by the Revenue which is subject to the provisions of unjust enrichment. For this purpose, the matter is remanded to the adjudicating authority to decide afresh after affording an opportunity of hearing to the appellant. The appeals are disposed of as indicated above.
(Dictated & pronounced in open Court on 30.8.06)