Custom, Excise & Service Tax Tribunal
Aquaguard Plastic & Polymers Pvt. Ltd vs C.C.E.& Cus.,Vadodara on 25 May, 2017
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, O-20, NMH Compound Ahmedabad Central Excise Appeal No.579 of 2011-SM Arising out of the Order-in-Appeal No.Commr (A)/59/VDR-II/2011 dated 14.2.2011 passed by the Commissioner(Appeals), Central Excise, Vadodara. Aquaguard Plastic & Polymers Pvt. Ltd .. Appellant Vs. C.C.E.& Cus.,Vadodara .. Respondent
Appearance:
Present Shri Manish K. Kaji, Advocate for the appellant Present Shri S.N. Gohil , A.R. for the Respondent-Revenue Coram: Honble Dr. D.M. Misra, Member (Judicial) Date of hearing:24.3.2017 Date of pronouncement:25.5.2017 Final Order No.A/11204/2017 Per Dr. D.M. Misra:
Heard both sides. This appeal is filed against the Order-in-Appeal No. Commr (A)/59/VDR-II/2011 dated 14.2.2011 passed by the Commissioner(Appeals), Central Excise, Vadodara.
2. Briefly stated the facts of the case are that consequent to the decision of the Tribunal in favour of the appellant, they had filed a refund claim on 05.1.2007 for an amount of Rs.32,85,761.57 which they had earlier paid under protest. A show cause notice was subsequently issued to them on 09.4.2007 proposing its rejection/transfer to Consumer Welfare Fund on the ground of unjust enrichment. The appellant filed necessary evidences and a Chartered Accountant Certificate claiming that the burden of duty has been borne by them and not passed on to any other person. However, their refund claim was rejected on 06.11.2007 on the ground of unjust enrichment. Later, on filing an appeal against the said order, the ld. Commissioner (Appeals) allowed their appeal vide order dated 28.11.2008 and consequently the refund amount of Rs.31,76,563/- was received by the appellant on 17.4.2009. The appellant thereafter, on 22.5.2009 filed an application seeking interest for the delayed period of the refund amount. After considering their representation, the adjudicating authority allowed interest of Rs.2089/- for the period 09.4.09 to 12.4.09. Aggrieved by the said order, the appellant filed an appeal before the ld. Commissioner (Appeals) who, after analyzing the issue observed that the appellants are entitled to the refund from 03.3.2009 to 12.4.2009. Hence, the present appeal.
3. Shri Manish K. Kaji, ld. Advocate for the appellant submitted that the refund claim was filed by them on 5.1.2007 and since the amount was sanctioned and paid to them in April 2009 they are eligible to interest on expiry of three months from the said date i.e. from 5.4.2007 till the date of disbursement of the refund amount under Section 11BB of the CEA, 1944 in view of the principle laid down by the Honble Supreme Court in the case of Ranbaxy Laboratories Ltd. vs. UOI and others 2011(273) ELT 3 (SC). It is his further contention that in spite of submitting all necessary evidences including C.A. certificate, the Department wrongly rejected their claim on the ground of unjust enrichment and erroneously transferred to the consumer welfare Fund. However, the ld. Commissioner (Appeals), after appreciating the evidences vide order dated 28.11.2008 decided the issue in their favour. It is his contention that even though the refund amount was transferred to Consumer Welfare Fund by the adjudicating authority as on 06.11.2007 that cannot be a ground for denial of interest on expiry of three months from the date of application of refund. In support, they referred to the judgment dated 18.3.2016 of Honble Gujarat High Court in the case Purnima Advertising Agency Pvt. Limited Vs. Union of India in Special Civil Application No.20496 of 2015.
4. Ld. A.R. for the Revenue reiterated the findings of the ld. Commissioner (Appeals). Further, he submitted that the appellant had filed refund application after one year from the date of order of the Tribunal. Hence, in view of judgment of the Honble Supreme Court in the case of Dena Snuff (P) Ltd. vs. C.C.E., Chandigarh 2003 (157) ELT 500 (SC) the refund itself is barred by limitation. Ld. A.R. has further submitted that in the impugned order, the ld. Commissioner (Appeals) has considered their request for interest and allowed it for the period 3.3.2009 to 12.4.2009.
5. In his rejoinder, the ld. Advocate for the appellant submitted that the principle of law laid down in Dena Snuff (P) Ltd. (supra) is not applicable to the facts of the present case inasmuch as, they have received order of the Tribunal on 05.1.2006 and within one year i.e. 05.1.2007 they filed refund claim. Besides, in view of the judgment of the Honble Kerala High Court in the case of ITEL Industries Ltd. Vs. Commissioner of C.Ex. 2014 (301) ELT 288(Ker.) after insertion of second proviso to Section 11B of CEA, 1944, there cannot be limitation of one year for claiming refund, when the duty is paid under protest.
6. Heard both sides and perused the record. There is no dispute of the fact that after classification issue was decided in favour of the appellant by the Tribunal vide order No.A/1920-1931/WZB/2005/C II/EB dated 25.11.2005, they filed refund claim on 05.1.2007. The refund claim was rejected by the adjudicating authority on the ground of unjust enrichment, but later, the ld. Commissioner (Appeals) considering the same set of evidences on record held it in favour of the appellant observing that burden of duty has not been passed on by the Appellant to any other persons. In these circumstances, even though the refund claim was transferred to the Consumer Welfare Fund, in view of the judgments of the Honble Gujarat High Court in Purnima Advertising Agency Pvt. Ltds case (supra)., the appellant cannot be deprived the right to claim interest even though the amount was transferred to Consumer Welfare Fund for no fault of theirs. Also, the decision of the Honble Supreme Court in Dena Stuffs(supra) is not applicable to the facts and circumstances of the present case.
7. In Ranbaxy Laboratories Ltd.s case(supra) their Lordships interpreting Sec. 11BB of CEA,1944 observed as:
15.?In view of the above analysis, our answer to the question formulated in para (1) supra is that the liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made.
8. Therefore, the ratio laid down by the Honble Supreme Court in the above case is applicable to the facts of the present case and the appellants are accordingly entitled to interest on the refund amount after expiry of three months from the date of application i.e. from 5.1.2007 till the amount was sanctioned to the appellant. In result, the impugned order is set aside and the appeal is allowed on the above terms.
(Pronounced in the open Court on 25.5.2017) (Dr. D.M. Misra) Member (Judicial scd/ Appeal No.E/579/2013-SM 1