Custom, Excise & Service Tax Tribunal
Glossy Color &Amp Paints vs Delhi West on 16 July, 2021
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CUSTOMS EXCISE & SERVICE TAX APPLELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
COURT NO. II
Service Tax Appeal No.50524 of 2019 (SM)
[Arising out of Order-in-Appeal No.269/Central Tax/Appl-II/Delhi/2018 dated 26.11.2018
passed by the Commissioner (Appeals), Central Goods and Service Tax, New Delhi.]
M/s.Glossy Colour & Paints, Appellant
50, A & B, Shivaji Marg,
New Delhi,
VERSUS
Commissioner of Central Tax Respondent
Kirti Nagar, Delhi West Commissionerate, APPEARANCE:
Ms.Shreya Dahiya, Advocate for the appellant Shri Pradeep Gupta, Authorised Representative for the respondent. CORAM: HON'BLE SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) FINAL ORDER NO.51670/2021 DATE OF HEARING:26.03.2021 DATE OF DECISION:16.07.2021 ANIL CHOUDHARY:
The appellant are registered under Central Excise as a manufacturer of excisable goods. On the basis of investigation conducted by the jurisdictional Central Excise Authorities, demand of central excise duty along with interest and penalty has been confirmed against them which has ultimately been set aside by the Hon'ble CESTAT vide Final Order No.A/52539-52543/2017-EX(DB) dated 14.03.2017. Pursuant thereto, the appellant have filed refund claim of Rs.15,00,000/- deposited by them during March, 2013 under Section 35 (F) of Central Excise Act, 1944 as pre-deposit in compliance with the direction issued by the CESTAT at that time. The Adjudicating Authority has sanctioned the refund claim in full along with interest from the date of deposit of the amount till the date of actual refund thereof.2
2. The Revenue preferred appeal before the Commissioner (Appeals) on the ground that the interest on the refund claim should have been granted from the date of communication of the final order of the Tribunal till the date of grant of refund, and not from the date of pre-deposit as erroneously held by the Adjudicating Authority.
3. Ld. Commissioner (Appeals) upon hearing the parties, observed that under the amended Section 35 F read with Section 35 FF, it has been provided that the amount deposited by way of pre-deposit prior to the commencement of Finance (No.2) Act, 2014, shall continue to be governed by the provisions of Section 35 F as it stood before the commencement of the said Amendment Act (6th August, 2014). Admittedly, in this case, pre- deposit was made in the month of March, 2013 prior to the Finance No.2 Act, 2014. Accordingly, appellant/assessee shall be entitled to grant of interest from the date of communication of the final order of this Tribunal till the date of actual refund of pre-deposit. Accordingly, order-in-original sofar as it related to calculation and grant of interest, was quashed and the matter remitted to the Adjudicating Authority for re-calculation of the interest component. Being aggrieved, the appellant/assessee is before this Tribunal.
4. Heard the parties.
5. Ld. Counsel for the appellant has urged that the dispute mainly related to valuation of excisable goods manufactured by the appellant. The amount was deposited during investigation at the insistence of the Department as the Department had seized the goods valued at Rs.13,88,815/-. The issue was finally decided in favour of assessee. The appellant made the pre- deposit in the second round of litigation as directed by this Tribunal vide 3 Stay Order No. SO/56093-56097/2013-EX (DB). Accordingly, the deposit was made vide challan dated 12.03.2013 of Rs.5 lakh, dated 14.03.2013 of Rs.7 lakh and dated 19.03.2013 of Rs.3 lakhs, totalling Rs.15 lakhs. Pursuant to final order of this Tribunal dated 14.03.2017, the appellant was successful in appeal and accordingly, prayed for refund vide letter/application dated 12.12.2017. The Adjudicating Authority was pleased to grant the refund and also granted interest @6% p.a. from the date of deposit till the date of refund. Following the guidelines contained in para 26 of the CBEC Circular No.1053/02/2017-EX dated 10.03.2017, wherein it was clarified that the assessee shall be entitled to refund of the amount deposited along with interest at the prescribed rate from the date of deposit to the date of refund in terms of Section 35 FF of the Act. It is also instructed in para 26(iii) and (iv) of the said Circular, that even if the Department contemplates appeals against the order impugned, which is in favour of the assessee, refund along with interest would still be payable as per the time limit prescribed in the law or in the order, unless such order is stayed by the Competent Appellate Authority. Reliance was also placed on CBEC Circular No.984/08/2014-CX dated 16.09.2014. Accordingly, ld. Counsel states that there is no error in the order-in-original granting interest from the date of deposit till the date of refund, which is as per the circular of the Board/Government, and the same was binding on the Adjudicating Authority and/other Departmental Officers including the Commissioner (Appeals). Further, the Commissioner (Appeals) has not found any error in following of the Board's Circulars by the Adjudicating Authority, and has set aside the order granting interest by non-speaking cryptic order. Accordingly, she prays for setting aside the order-in-appeal and restoration of the order- in-original.
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6. Ld. Departmental Representative for Revenue contested the impugned order and also placed reliance on the decision of this Tribunal in the case of J.K. Cement - Appeal No.50479 of 2019 (SM) vide Final Order No.51052 of 2021 dated 2.3.2021.
7. I have considered the rival contentions. I find that the issue is no longer res integra and in the case of J.K. Cement (supra), wherein under the similar facts and circumstances, this Tribunal following the ruling of the Hon'ble Supreme Court in the case of Sandvik Asia Pvt. Ltd. - 2016 (196) ELT 257 (SC) as well as of the Hon'ble Allahabad High Court in the case of Hello Mineral Water (P) Ltd. - 2004 174 (ELT) 422 (Allahabad) held that interest is payable from the date of deposit till the date of grant of refund. Further, the Division Bench of this Tribunal in Parle Agro Ltd. - 2018 (360) ELT 1005 (Tribunal-Allahabad) has held that interest is payable @12%, following the ruling of the Hon'ble Supreme Court in the case of Sandvik Asia Ltd. (supra).
8. Accordingly, the order-in-appeal is set aside. It is further held that the appellant is entitled for interest @12% p.a. from the date of deposit till the date of refund. The order-in-original is restored with the modification in the rate of interest. Further, the Adjudicating Authority is directed to grant further interest as per the order of this Tribunal within a period of 45 days from the date of receipt of the copy of this order.
9. The appeal is allowed.
[Order pronounced on 16.07.2021] (ANIL CHOUDHARY) MEMBER (JUDICIAL) Ckp.
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