Custom, Excise & Service Tax Tribunal
M/S Hawkins Cookers Ltd vs Commissioner Of Central Excise, ... on 4 August, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. E/515/2009 (Arising out of Order-in-Appeal No. AH/42/M-III/2009 dated 2.2.2009 passed by the Commissioner of Central Excise (Appeals), Mumbai-II ). For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy : Seen
of the order?
4. Whether order is to be circulated to the Departmental : Yes
authorities?
======================================================
M/s Hawkins Cookers Ltd.
Appellant
Vs.
Commissioner of Central Excise, Mumbai-III
Respondent
Appearance:
Shri J.H. Motwani with
Shri Prasad Paranjape
Advocate
for Appellant
Shri H.B. Negi
SDR
for Respondent
CORAM:
SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
Date of Hearing: 04.08.2010
Date of Decision: 04.08.2010
ORDER NO. WZB/MUM/2010
Per: Shri Ashok Jindal, Member (Judicial)
The appellants have filed this appeal against the order of denial of interest on delayed refund.
2. The facts of the case are that on 8.1.1990, the appellants filed a refund claim of Rs.98,094.63 being the duty wrongly paid by them. The said claim was rejected by the Assistant Commissioner on 24.8.1995. Against the said order, the appellants preferred an appeal before the Commissioner (Appeals) who allowed the refund claim to the appellants vide order dated 29.10.1999. The order was not challenged by the department and same had attained finality, but the Assistant Commissioner again rejected the refund claim vide its order dated 7.8.2001. The same was again challenged before the Commissioner (Appeals), who also rejected the claim vide his order dated 23.2.2002. The appellants came before this Tribunal and this Tribunal had allowed the refund claim vide its order dated 26.3.2006. Again the Assistant Commissioner rejected the refund claim to the party vide its order dated 26.2.2007. The appellants again preferred an appeal before the Commissioner (Appeals) who also rejected the refund claim vide its order dated 3.9.2007. Again the appellants came before this Tribunal and this Tribunal again sanctioned the refund claim to the appellants vide its order dated 18.2.2008. Thereafter the Assistant Commissioner allowed the refund claim without any interest on 27.3.2008. The interest was denied on the delayed refund by the lower authorities saying that the dispute has finally been settled by this Tribunal vide its order dated 18.2.2008. Aggrieved from the said order of denial of interest on delayed refund, the appellants are before me.
3. The learned Advocate appearing on behalf of the appellants submitted that the provisions of Section 11BB were introduced w.e.f. 26.5.1995, which provides interest on delayed refund. The refund claim was allowed by the Commissioner (Appeals) vide its order dated 29.10.1999, which was not challenged by the department and attained the finality. Instead of giving the refund, the department denied the refund by one reason or the other, which causes the appellants, the intervention of this Tribunal and lower authorities did no pay any respect to the order of this Tribunal and again rejected the refund claim. The appellants were forced to take the intervention of this Tribunal again and this Tribunal on 18.2.2008 again allowed the refund claim by passing strictures and holding that it was incumbent for the lower authorities to respect the order of the Tribunal. He submitted that as per the provisions of Section 11BB of the Central Excise Act, 1944, the appellants are entitled for interest after three months from the date of their application for refund. In this case, the provisions of Section 11BB came in force w.e.f. 26.5.1995 although the refund claim was filed on 8.1.1990, the appellants be given the interest after three months from 26.5.1995.
4. On the other hand, the learned DR submitted that this refund claim had attained finality vide order of this Tribunal dated 18.2.2008 and thereafter the refund claim has been issued within three months. Hence, there is no question of interest on delayed refund.
5. Heard both sides and perused the records.
6. On careful examination of the case records, I find that Section 11BB of the Central Excise Act, 1944 deals with the situation where the assessee is entitled to claim interest on delayed refund. The provisions of Section 11BB are reproduced herein as under: -
If any duty ordered to be refunded under sub-section (2) of section 11B to any applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, [not below five per cent] and not exceeding thirty per cent per annum as is for the time being fixed [by the Central Government, by Notification in the Official Gazette], on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty :
Provided that where any duty ordered to be refunded under sub-section (2) of section 11B in respect of an application under sub-section (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, till the date of refund of such duty.
Explanation. - Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal [National Tax Tribunal] or any court against an order of the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise], under sub-section (2) of section 11B, the order passed by the Commissioner (Appeals), Appellate Tribunal or, as the case may be, by the court shall be deemed to be an order passed under the said sub-section (2) for the purposes of this section.] On perusal of the above said provisions, it is clear that in case any duty is found refundable then if the duty is not refunded within a period of three months from the date of receipt of the application under section 11B of the Act then interest on the amount is liable to be paid on expiry of a period of three months from the date of receipt of the application. The explanation of Section11BB of the Act shows that it introduces deeming fiction that where the order for refund of duty paid is made not by the Assistant Commissioner or Deputy Commissioner, but is made by the Commissioner (Appeals), appellate Tribunal or by the Court, then for the purpose of this section the order made by the Commissioner (Appeals), appellate Tribunal or by court shall be deemed to be an order made under sub-section (2) of Section 11B of the Act. Thus, the purpose of introducing explanation was to introduce deeming fiction that for the purpose of sub-Section (2) of Section 11B if the order is made not by the Assistant Commissioner or Deputy Commissioner, but by the higher authorities, the order made by the higher authorities shall be deemed to be an order made by the Assistant Commissioner or Deputy Commissioner for the purpose of sub-Section (2) of Section 11B of the Act. Interest under Section 11BB of the Act becomes payable on expiry of a period of three months from the date of receipt of the application, if amount is not refunded within three months from the date of receipt of the application.
7. In this case, the refund claim was sanctioned by the Commissioner (Appeals) vide his order dated 29.10.1999, which was not challenged by the department and the same has attained finality. Thereafter not giving refund within three months by the department, the appellants are entitled to claim interest after three months after 29.10.1999. By rejecting the refund claim on one reason or the other even after the direction of this Tribunal vide its order dated 26.3.2006 does not helps the Revenue by not giving the interest. The defence taken by the learned DR is not acceptable as the officers did not pay any respect to the order of this Tribunal dated 6.3.2006 and again rejected the refund claim. If the Revenue was aggrieved really to sanctioning of the refund claim, they would have been preferred an appeal against the order of the Commissioner (Appeals) sanctioning the refund claim dated 29.10.1999, which Revenue has failed to do so. Hence, in the facts and circumstances of the case, the appellants are entitled for interest on the refund claim w.e.f. the date of expiry of three months after 29.10.1999. The case law cited by the learned Advocate in the case of Commissioner of Central Excise, Pune-III Vs. Ballarpur Industries Ltd. reported in 2008 (229) ELT 498 (Bom), Swaraj Mazda Ltd. Vs. UOI reported in 2009 (235) ELT 788 (Bom) and UOI Vs. Shreeji Colour Chem Industries 2008 (230) ELT 199 (SC) are also support the case of the appellants.
8. With the above discussion, the appellants are entitled for the interest after expiry of three months from 29.10.1999, the appeal is disposed of in the above manner.
(Pronounced in Court on ..) (Ashok Jindal) Member (Judicial) Vks/ 1