Custom, Excise & Service Tax Tribunal
Jagdamba Ispat vs Commissioner, Central Excise &Amp ... on 4 July, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH COURT NO.IV
EXCISE APPEAL NO. 50887/2021
[Arising out of Order-in-Appeal No. 85-86 (SM) CE/ JPR/2021 dated
10.05.2021 passed by the Commissioner Central Excise & CGST
(Appeals), Jaipur]
JAGDAMBA ISPAT
A-338 (C), Road No. 17, VKI Area
Jaipur, Rajasthan
APPELLANT
Vs.
COMMISSIONER, CENTRAL EXCISE &
RESPONDENT
CGST-JAIPUR I WITH EXCISE APPEAL NO. 50930/2021 [Arising out of Order-in-Appeal No. 94 (SM) CE/ JPR/2021 dated 03.06.2021 passed by the Commissioner Central Excise & CGST (Appeals), Jaipur] JAGDAMBA TMT MILLS LTD A-127/128, SKS Industrial Area, Reengus Sikar, Rajasthan 332404.
APPELLANT Vs. COMMISSIONER, CENTRAL EXCISE & RESPONDENT CGST-JAIPUR I APPEARANCE:
S/Shri Jayant Kumar & Sohan Bandyopadhyay, Advocates for the Appellant Shri Ishwar Charan, Authorised Representative for the Department CORAM:
HON'BLE MRS RACHNA GUPTA, MEMBER (JUDICIAL) Date of Hearing : July 04, 2022 Date of Decision: July 04, 2022 E/50887/2021 FINAL ORDER No. 50594-50595 /2022 PER RACHNA GUPTA Present appeal disposed off two appeals issue being common to both of them. The details of appeals are tabled below:
Appeal Date of Date of Date of Amount and Date of Date of Date of Date of
No. show Order in Tribunal date of application SCN OIO OIA
Cause Original Final deposit for claim of denying denying denying
notice order interest claim of claim of claim of
interest interest interest
E/5088 29.10. 31.12.19 10.10.19 Rs. 21.01.2020 21.02.20 11.05.20 10.05.21
7/2021 2014 19,26,012/-
on
25.01.2012
E/5093 24.12. 27.01. 10.10.19 Rs. 04.02.2020 17.03.20 18.05.20 03.06.21
0/2021 2014 2020 22,82,105
on
25.01.2012
• Rs. 9,094
on
10.09.2012
2. The facts relevant for the purpose are as follows:-
i. That the appellants herein are engaged in manufacture of MS Ingots and MS Bars. The department observed that appellants have fraudulently availed Cenvat Credit of the amount as mentioned above based on the cenvatable invoices issued by M/s. Isha Enterprises in favour of the various dealers including the appellants without supplying any goods as mentioned therein.
ii. This Tribunal vide respective final orders, as mentioned in the above table, had decided the appeal before the Tribunal in favour of the assessee/ appellant herein. Pursuant thereto the claim for refund of the amount as was deposited by the appellant, as mentioned in the table above, which includes the amount as was deposited during investigation also was filed by the appellant.
iii. The said claim has been sanctioned. However, no order for granting interest on the said amount has been passed. Being aggrieved the appeal before Commissioner (Appeals) was filed. However, same has also been rejected. Consequently the appellant is before this Tribunal.2
E/50887/2021
3. I have heard Shri Jayant Kumar and Shri Sohan Bandyopadhyay, learned Counsels appearing for the Appellant and Shri Ishwar Charan, learned Authorised Representative for the Department.
4. Learned Counsel for the appellant has mentioned that the issue involved herein has already been settled by various decisions of High Court as well as of this Tribunal. The assessee has been held entitled for interest that too at the rate of 12% on the amount as was deposited by the assessee during investigation pursuant to the departmental decision. Learned Counsel has relied upon the following case laws:
1. Sandvik Asia Ltd.
[2006 (196) ELT 257 (SC)];
2. Parle Agro (P) Ltd., vs. Commissioner, CGST [2021-TIOL-306-CESTAT-ALL];
3. M/s Batra Henlay Cables v. Commissioner of CGST [2022-TIOL-69-CESTAT-DEL];
4. Pr. COMMR. of CGST, New Delhi vs Emmar MGF Construction Pvt. Ltd. [2021 (55) G.S.T.L. 311 (Tri. - Del.)];
5. Kesar Enterprises v. Commissioner CGST [2022-TIOL-01-CESTAT-ALL]; and
6. Jindal Spinning Mills Ltd Vs Commissioner of Customs (Appeals), New Delhi [2022-TIOL-176-CESTAT-DEL].
5. Per contra learned Departmental Representative has mentioned that the Commissioner (Appeals) has appreciated all the submissions made by the appellant. After meticulously observing the provisions of Central Excise Act, 1944, i.e. section 11B of the Act; Commissioner (Appeals) has rightly observed that the impugned refund claim since has been considered and sanctioned within the time limit of three months as prescribed under said section 11B of Central Excise Act, the entitlement for interest as claimed herein is therefore, not maintainable hence is 3 E/50887/2021 rightly been denied. Impressing upon no infirmity in the order, the appeal in hand is prayed to be dismissed.
6. After hearing the rival submissions and perusing the record, it is observed and held as follows:
The only issue in the impugned appeals is claim of interest on the deposits as were made by the appellant during investigation and pursuant to the initial order of Departmental Adjudicating Authority, confirming the demand proposed in the impugned show cause notices. It is observed that the Adjudicating Authority below has though sanctioned the refund of the said deposited amount, however, while relying upon the section 11B of the Central Excise Act, 1944 has denied the entitlement for interest on the said deposit. It is observed that the issue has been dealt in detail by this Tribunal in the case of Parle Agro (P) Ltd. (supra). Even the Hon'ble Supreme Court in the case of Sandvik Asia Ltd. (supra) has dealt with the issue deciding the same in favour of the assessee holding the assessee entitled for the interest @12 % for the refund of the amount which were deposited not as the amount of duty.
7. Parle Agro (P) Ltd. (supra) has discussed the legal provision as follows:
"26. Section 11A of the Excise Act relates to recovery of duties not levied or not paid or short levied or short paid. It provides that in such cases, the central excise officer shall serve a notice on the person chargeable with duty requiring him to show cause why he should not pay the amount of duty alongwith interest payable thereon under section 11AA.
27. Section 11AA deals with interest on delayed payment of duty. It provides that the person, who is liable to pay duty, shall, in addition to the duty, be liable to pay interest at the rate specified in sub-section (2). The interest rate that has been specified in sub-section (2) is not below 10% and not exceeding 36% per annum as the Central Government, by notification in the Official Gazette fix.
28. Section 11B of the Excise Act deals with claim for refund of duty and interest, if any, paid on such duty. It provides that any person claiming refund of any duty of excise and interest may make an application for such refund of duty and interest.4
E/50887/2021
29. Section 11BB provides for interest on delayed refund. It states that if any duty ordered to be refunded under sub-section (2) of section 11B is not refunded within three months from the date of receipt of the application, than the applicant shall be entitled to interest after the expiry of three months from the date of receipt of the application at such rate not below 5% and not exceeding 30% as may be notified by the Central Government in the Official Gazette.
30. In the present case, the provisions of section 11B of the Excise Act would not be applicable. This is for the reason that the appellant was not claiming refund of duty. The applicant, as noticed above, had claimed refund of the revenue deposit. Such a finding has also been clearly recorded by the Tribunal in the order dated 31.01.2017, which order has attained finality.
31. Section 11D of the Excise Act deals with duties of excise collected from the buyer to be deposited with Central Government. It provides that every person who is liable to pay duty and has collected any amount in excess of the duty assessed from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government.
32. Section 11DD of the Excise Act deals with interest on the amount collected in excess of the duty. It provides that where an amount has been collected in excess of the duty from the buyer of such goods, the person who is liable to pay such amount shall, in addition to the amount, be liable to pay interest at such rate not below ten per cent., and not exceeding thirty-six per cent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette."
8. The Tribunal in the case of Parle Agro vs CCE NOIDA reported as [2018 (360) E.L.T. 1005 (Tri. - All.)] has held that "6. Having considered the rival contentions, we find that as held by Hon' ble Punjab and Haryana High Court and as earlier held by this Tribunal the amounts, which are deposited during the pendency of investigation and proceedings, if the same are not adjudged as duty, fine or penalty then the amount that is not adjudged as duty, fine and penalty is to be treated as revenue deposit and the provisions of refund of duty shall not be applicable to the same. The amount which has been adjudged is as per the authority of law and the amount which is in excess of the adjudged amount if retained that such retention of said amount shall be without authority of law and Article 365 of Constitution of India has not authorized Revenue to retain such amount. In the present case, the penalty was reduced to Rs. 10 lakh. Therefore, we allow Revenue to recover Rs. 10 lakh from Rs. 1.5 crore which was deposited by the appellant and direct the Original Authority to refund Rs. 8,36,185/- and Rs. 1,40,00,000/- and also pay the appropriate interest on the same. We do not pass any order in respect of bank guarantee since the matter was 5 E/50887/2021 not subject matter of either the Order-in-Original or Order-in-Appeal impugned. We allow the appeal as held hereinabove."
The said Division Bench has followed the ruling of the Apex Court in the case of Sandvik Asia Ltd. (supra) and has pleased to grant interest @ 12% p.a. from the deposit till the grant of refund, with reference to Section 35FF of the Central Excise Act.
9. Keeping in view that the issue is no more res integra that any deposits made if have not been confirmed as duty the time bar of Section 11B of Central Excise Act cannot be invoked. It stands clear that the amount in question was not the amount of duty after the Tribunal set aside the duty liability of the appellant. Hence, it is held that section 11 B is not applicable to such deposits. Commissioner (Appeals) is held to have wrongly invoked the said provisions. In terms of section 35 of Central Excise Act, the amount of refund being in the nature of deposit only appellant is held entitled for the interest on the said amount that too @ 12 % from the date of deposit till the date of realisation thereof. In view of the entire above discussions, the orders under challenge are hereby set aside.
10. Consequent thereto both the appeals stand allowed.
( RACHNA GUPTA ) MEMBER (JUDICIAL) ss 6