Custom, Excise & Service Tax Tribunal
Marshall Foundry Works Pvt Ltd vs Faridabad I on 15 March, 2022
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CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
SCO 147-148, SECTOR 17-C, CHANDIGARH-160017
SINGLE MEMBER BENCH
Court-I
Appeal No.E/60248-60252/2020-Ex (SM)
(Arising out of Order-in-Appeal No.29/CE/CGST-Appeal-Gurugram-SG/2020-21, OIA
No.31/CE/CGST-Appeal-Gurugram-SG/2020-21,OIA No.30/CE/CGST-Appeal-
Gurugram-SG/2020-21, No.27/CE/CGST-Appeal-Gurugram-SG/2020-21,
No.28/CE/CGST-Appeal-Gurugram-SG/2020-21 dated 31.7.2020 passed by the
Commissioner (Appeals), CGST, Plot No.24, Mudit Square, Sector 32, Gurugram-
122001)
M/s. Marshall Foundry Works Pvt.Ltd. Appellant
(Plot No.221 & 224, Sector 24, Faridabad)
M/s. Marshall Auto Industries Ltd.
(Plot No.283, Sector 24, Faridabad)
M/s. Marshall Auto Cast Pvt.Ltd.
(Plot No.360, Sector 24, Faridabad)
M/s.Marshall Casting Limited
(Plot No.347-348, Sector 24, Faridabad)
M/s. Marshal Foundry Engg. Pvt. Limited
(Plot No.359, Sector 24, Faridabad)
Vs.
Commissioner of CE & ST, Faridabad Respondent
(Block D, New CGO Complex, NH-IV, NIT, Faridabad-121001 )
Present for the Appellant: Shri Anubhav Goel, CA
Present for the Respondent: Shri Bhasha Ram, AR
Coram: Hon'ble Mr. Ashok Jindal, Member (Judicial)
Date of hearing/Decision: 15.03.2022
FINAL ORDER NO.60055-60059/2022
Per: Ashok Jindal
The appellants are in appeal against the impugned orders
wherein the claim of interest to pay on delayed refund @ 12% was
rejected by the authorities below.
2. The brief facts of the case are that this Tribunal vide Final Order
No.61058-61062/2019 dated 28.11.2019 has held that the appellants
are entitled to claim interest on delayed refund from the date of
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deposit till its realization. In the said case, this Tribunal framed the
issue whether the appellants are entitled to claim interest @ 12% of
the deposit made during the period of investigation till its realization
or not? Consequent to that order, the authorities below granted
interest @6% in terms of section 11BB of the Act. The appellants
aggrieved that the interest provided @6% instead of @ 12% has been
examined by this Tribunal in the earlier proceedings, the appellant
claimed the differential interest which was rejected by the authorities
below. Against, the said order, the appellants are before me.
3. Ld. Chartered Accountant for the appellants has relied on the
decision of Allahabad Bench of this Tribunal in the case of M/s. Parle
Agro Pvt. Ltd. vide Final Order No.70180-70181/2021 dated
25.5.2021.
4. On the other hand, ld.AR opposed the contention of the
Chartered Accountant and submits as under: -
4.1 That the basic and core issue in these appeals is that
neither the Appellants contested the statutory provisions
of Section 11B of the Act under which refund was
sanctioned to them nor the statutory provisions of
Section 11BB of the Act under which interest @6% was
granted as per statutory provisions, which is clear
admission and acceptance of refund under Section 11B
and interest under Section 11BB of the Act and when
these facts are on record and not disputed then the
Appellants have no legal right to claim interest @12%
without challenging these statutory provisions and thus
these appeals are not maintainable and merit dismissal.
4.2 That the Appellants have sought interest @12% by
referring Hon'ble Tribunal Order dated 28.11.2019 and
corrigendum dated 02.12.2019, but operative portion of
these orders merely held that appellants are entitled to
claim interest on delay refund from the date of deposit
till its realization. Thus claims that they are entitled
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interest @12% is without any legal support. When the
Hon'ble Tribunal not given any specific findings on the
rate of interest then it is automatic that rate of interest
would be available only as per the law and that has
already been sanctioned @6%. As regards relying upon
various judgements when the issue already stands
finalized by the Hon'ble Tribunal then the issue cannot
be opened afresh and these judgements are having no
relevance.
4.3 That it is well settled position of law that any claim of
amount from Government can be disbursed only based
on statutory provisions and there is no legal mandate
with the tax authority to act beyond the statutory
provisions;
4.4 That the fact on record is that when the Appellants
claimed interest @12% per annum from the date of
deposit of the amounts, but failed to place on record any
statutory provisions in support of said claims. The
Appellants only relied upon certain decisions, which are
based on decisions rendered by Hon'ble High Courts as
well as Hon'ble Apex Court under Constitutional powers
by way of writ jurisdiction and since the Hon'ble
Tribunal is not having such Constitutional powers and
is creature of statute, therefore, claiming any monetary
benefits on the basis of such decisions is without legal
sanctity. In support following decisions are relied upon:-
i) The Hon'ble CESTAT, Principal Bench, New Delhi
in case of AFCONS Infrastructure Ltd. v. Commr. of
C.Ex., Visakhapatnam - 2006 (204) ELT 333 (Tri.Del.) -
held in Para 8.6 (relevant portion) as under:-
"8.6 ................. The decision in Kuli Fireworks
Industries in which the Hon'ble Supreme Court while
directing the refund of duty, awarded interest cannot
generate power to award interest for the Tribunal
contrary to the provisions of Section 11BB of the Act
since the award of interest under the decision is
obviously relatable to the plenary powers of the
Supreme Court. Even the award of interest by the
High Courts in exercise of their writ jurisdiction will
not constitute a ratio creating power of the Tribunal
or revenue authorities to award interest contrary to
provisions of Section 11BB on the delayed
refunds....."
ii) On the issue of interest on refund sanctioned the
Division Bench of Hon'ble CESTAT, Chennai in case of
Hindustan Photo Films Manufacturing Co. Ltd. v. CCE
Salem - 2018 (364) ELT 471 (Tri.Chennai) - while
discussing the judgements titled as Commissioner of
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Income Tax v. Gujrat Fluoro Chemicals - 2013 (296) ELT
433 (S.C.) - and Sandvik Asia Ltd. v. Commissioner -
2006 (196) ELT 257 (S.C.) - has held as under in Para 6
(relevant portion):-
"6. ............ we note that the appellant did not quote
any statutory provision under the Customs Act,
1962 to support their claim. Any claim of amount
from the Government can be disbursed only based on
a statutory provision. The Tribunal cannot pass an
order for general compensation, the facts of the
present case. We note that in Gujarat Fluoro
Chemicals (supra), the Hon'ble Supreme Court,
examining similar provisions under the Income Tax,
held that the payment ordered in Sandvik case
(supra) cannot be considered as interest on interest
and it was ordered in special circumstances as a
compensation for unduly long delay in sanctioning
the refund/interest. It is clear that interest as
indicated under the Customs Act, 1962 only can be
paid to the appellant and no other amount which is
not covered by the statutory provisions can be paid
and on this ground, the impugned order cannot be
interfered with. Accordingly, the appeal is dismissed.
4.5 That in support of decision of the department allowing
interest @6% following Notification/decisions are relied
upon:-
i) A copy of Notification No.67/2003-Central Excise
(N.T.) dated 12.09.2003 under Section 11BB of the
Central Excise Act, 1944 fixing the rate of interest
at six percent per annum.
ii) The CESTAT, Principal Bench, New Delhi in the case of
Devendra Udyog v. Commissioner of CGST, Jodhpur -
2020 (372) ELT 385 (Tri.Del.) - held that Notification
No.67/2003-C.E.(N.T.) issued under Section 11BB of
Central Excise Act, 1944 having fixed the rate of
interest @6% per annum for the purpose of said
section, interest rate of 6% only admissible to
assessee.
iii) A copy of Final Order No.51400-51402/2019 dated
31.10.2019 of the CESTAT, Principal Bench, New Delhi
in Service Tax Appeal Nos.50120-51022 of 2019 (SM) in
case of M/s Arihant Tiles & Marbles Pvt. Ltd. v. The
Commissioner (Appeals), CGST, Jodhpur under which
party's appeal claiming interest @12.5% dismissed
and held Revenue decision on sanctioning of
interest @6% as per Notification No.67/2003-
CE(N.T.) dated 12.09.2003. The Bench also referred
decision in Gujrat Flourochemicals (supra) also i.e.
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"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."
iv) The Hon'ble Gujrat High Court in the case of Vijay
Tanks and Vessels Ltd. v. UOI - 2019 (368) ELT 931
(Guj.) - directed to pay interest @6%.
v) The Hon'ble Madras High Court in the case of Estee
Auto Pressings (P) Ltd. v. Commissioner of C.Ex.,
Chennai-II - 2017 (346) ELT 72 (Mad.) - held that
refund admissible along with interest @6% from the
date of order till date of payment.
vi) The Constitutional Bench of Hon'ble Apex Court in
case of Commissioner of Cus. (Import), Mumbai v.
Dilip Kumar & Company - 2018 (361) ELT 577 (S.C.)
- has ruled as under in Para 19:-
"19. The well-settled principle is that when the words in
a statute are clear, plain and unambiguous and only
one meaning can be inferred, the Courts are bound to
give effect to the said meaning irrespective of
consequences. If the words in the statute are plain and
unambiguous, it becomes necessary to expound those
words in their natural and ordinary sense. The words
used declare the intention of the Legislature. In Kanai
Lal Sur v. ParamnidhiSadhukhan, AIR 1957 SC 907, it
was held that if the words used are capable of one
construction only then it would not be open to the
Courts to adopt any other hypothetical construction on
the ground that such construction is more consistent
with the alleged object and policy of the Act."
In view of above facts, statutory provisions and relied
upon decisions, the appeals merit dismissal.
5. Heard the parties and considered their oral/written submissions.
6. In the earlier round of litigation, this Tribunal has entertained
the issue "whether the appellant are entitled to claim interest @ 12%
of the deposit made during the period of investigation till its
realization." The said issue was allowed in favour of the appellants,
inadvertently the rate of interest could not be quoted in the said
order. The issue of rate of interest has been decided in the earlier
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round of litigation, therefore, I hold that the appellants are entitled to
claim the interest @ 12% from the date of deposit on its realization.
As the deposit were made by the appellants under protest, the
decisions relied on by the ld.AR are not applicable to the facts of the
case in hand. The issue in this case is whether the appellant is
entitled to claim interest @12% on delayed refund till its realization
has been examined by this Tribunal in the case of M/s. Parle Agro Pvt.
Ltd. (supra) wherein this Tribunal has held as under: -
"33. There is no provision in the Excise Act, which deals with refund of
revenue deposit and so rate of interest has not been prescribed, when
revenue deposit is required to be refunded.
34. To be able to have some guidance regarding the rate of interest in case
revenue deposit has to be refunded, the aid of the interest provisions under
section 11AA (which deals with interest on delayed payment of duty),
section 11BB (which deals with interest on delayed refunds under section
11B(2) and section 11DD (which deals with interest on the amount collected
in excess of the duty) can be taken.
35. The Notification issued under section 11AA of the Excise Act provides
interest at the rate of fifteen per annum. The notification is reproduced
below:
Notification No. 15/2016-C.E. (N.T.), dated 1-3-2016
Notification Under Section 11AA
Rate of interest on delayed payment of duty (w.e.f. 1-42016). - In
exercise of the powers conferred by section 11AA of the Central Excise Act,
1944 (1 of 1944) and in supersession of the notification of the Government
of India in the Ministry of Finance (Department of Revenue) No. 5/2011 -
Central Excise (N.T.), dated the 1st March, 2011 published in the Gazette of
India, Extraordinary, Part II, Section 3, sub-section (i), vide, number GSR
136(E), dated the 1st March, 2011, except as respects things done or
omitted to be done before such supersession, the Central Government
hereby fixes the rate of interest at fifteen per cent per annum for the
purpose of the said section.
2. This notification shall come into force from the 1st day of April, 2016.
36. The Notification issued under section 11BB provides interest at the rate
of six per cent per annum. It is reproduced below:
Notification No. 67/2003-C.E. (N.T.), dated 12-9-2003
Notification Under Section 11BB
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Interest @ 6% per annum on delayed refunds. - In exercise of the
powers conferred by section 11BB of the Central Excise Act, 1944 (1 of
1944) and in supersession of the notification of the Government of India in
the Ministry of Finance (Department of Revenue) No. 17/2002-Central
Excise (N.T.), dated the 13th May, 2002 [GSR 353(E), dated the 13th May,
2002], except as respect things done or omitted to be done before such
supersession, the Central Government hereby fixes the rate of interest at
six per cent per annum for the purpose of the said section.
37. The Notification issued under section 11DD provides interest @ of 15%
per annum on the amount collected in excess of duty. It is reproduced
below:
M.F. (D.R.) Notification No. 68/2003-C.E. (N.T.), dated 12-9-2003
Notification Under Section 11DD
Interest @ 15% per annum on amounts collected in excess of duty. - In
exercise of the powers conferred by section 11DD of the Central Excise Act,
1944 (1 of 1944) the Central Government hereby fixes the rate of interest
at Fifteen percent per annum for the purpose of the said section.
38. It would also be to pertain to refer to the Notification issued under
section 11AB of the Excise Act, as it existed prior to 08.04.2011. It provides
interest @18% per annum. The said Notification is reproduced below:
"Notification No. 6/2011-C.E. (N.T.), dated 1-3-2011
Notification Under Section 11AB
Rate of interest on delayed payment of duty. - In exercise of the
powers conferred by section 11AB of the Central Excise Act, 1944 (1 of
1944) and in supersession of the notification of the Government of India in
the Ministry of Finance (Department of Revenue) No. 66/2003-Central
Excise (N.T.), dated the 12th September, 2003 [GSR (E), dated the 12th
September, 2003], except as respects things done or omitted to be done
before such supersession, the Central Government hereby fixes the rate of
interest at eighteen percent per annum for the purpose of the said section.
This notification shall come into force from the 1st day of April, 2011."
39. In this connection reference can also made to the decisions of the
Allahabad High Court in Pace Marketing Specialities and Ebiz. Com
Private Limited, wherein after making reference to the decision of the
Supreme Court in Sandvik Asia Ltd., the High Court granted interest at the
rate of 12% per annum in matters relating to refund of amount deposited
during investigation and adjudication
.
40. In Riba Textiles, the Tribunal also granted interest at the rate of 12% on refund of amount deposited during investigation and at the time of entertaining the stay application.
41. In view for the aforesaid decisions, and the fact that the rate of interest varies from 6% to 18% in the aforesaid Notifications issued under sections 11AA, 11BB, 11DD and 11AB of the Excise Act, the grant of interest @12% per annum seems to be appropriate.
42. Thus, for the reason stated above, Excise Appeal No. 70628 of 2019 is allowed and the order dated 28.05.2019, passed by the Commissioner (Appeals) is modified to the extent that interest shall be granted to the appellant @12% instead of @6% from the date of deposit till the date of payment."
87. As the issue has been settled by this Tribunal in the case of M/s. Parle Agro Pvt. Ltd. (supra), therefore, I hold that the appellants are entitled to claim interest @ 12% per annum of deposit made during the investigation till its realization.
8. In these terms, the appeals are allowed by holding that the appellants are entitled to claim differential interest.
(dictated & pronounced in court) (ASHOK JINDAL) MEMBER (JUDICIAL) mk