Custom, Excise & Service Tax Tribunal
Gyal M.G.Gases Pvt. Ltd vs Cce, Indore on 18 December, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
COURT-II
Excise Appeal No.E/3182/2005-EX[DB]
[Arising out of Order-in-Appeal No.662 to 669-CE/IND/APPL-II/2003 dated 20th November, 2003 passed by the Commissioner (Appeals)-II, Indore]
For approval and signature:
HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
1. Whether Press reporters may be allowed to see 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
CESTAT (Procedure) Rules, 1982 for publication in
any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
authorities?
_____________________________________________
Gyal M.G.Gases Pvt. Ltd. Appellant
Vs.
CCE, Indore Respondent
Present for the Appellant : Shri.Rajesh Chhibber, Advocate
Present for the Respondent: Shri.Promod Kumar, DR
Coram:HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)
HONBLE MR.S.K. MOHANTY, MEMBER (JUDICIAL)
Date of Hearing/Decision: 18/12/2014
Final ORDER NO. 54979/2014
PER: RAKESH KUMAR
The facts leading to filing of this appeal are in brief as under:-
1.1 The appellant during the period of dispute were engaged in filling of hydrogen gas received from pipeline into retail cylinders and were clearing those cylinders without payment of duty by treating their activity as not amounting to manufacture. The Departmental Officers initiated enquiry sometime in 1997 and were of the view that the appellants activity amounts to manufacture. On 26.07.1997 the appellant paid an amount of Rs.10.00 Lakhs on ad-hoc basis towards their duty liability. Subsequently, a show cause notice was issued for demand of duty of Rs.17,56,355/- in respect of hydrogen gas cleared in retail cylinders and also for imposition of penalty on them. Since some stock of cylinders had been seized, the show cause notice also sought confiscation of the seized goods alongwith the the Truck from which the gas filled cylinders has been seized. The SCN was adjudicated by the Addl. Commissioner vide Order-in-Original dated 31.10.2002 by which he held that the appellants activity amounts to manufacture and accordingly, he confirmed the duty demand of Rs.17,56,355/- and appropriated the amount of Rs.10.00 Lakhs already paid by the appellant. He also demanded interest on this amount under Section 11AB and imposed penalty of an amount of Rs.1759782 on the appellant. He also ordered confiscation of the seized goods alongwith Truck with option to redeem on redemption fine. The appellant filed an appeal before the Commissioner (Appeals) against this order of the Additional Commissioner and the Commissioner (Appeals) vide Order-in-Appeal dated 20th November, 2003 held that the appellants activity does not amount to manufacture and set aside the Addl. Commissioners order with this order, the appellant became eligible for the refund of the duty of Rs.10.00 Lakhs which had been paid by them in November, 1997. They however, submitted an application for refund under Section 11 B on 06.07.2004. There after on 08.11.2004 they also made an application for sanction of interest on the refund amount.
2. The refund claim was sanctioned by the Asstt. Commissioner on 11.02.2005 but without interest. The appellant thereafter filed an appeal to the Commissioner (Appeals) against the ACs order dated 11.02.2005 praying for order of interest on the amount of refund for the period of delay. The Commissioner (Appeals) vide his order dated 30th June, 2005 sanctioned the interest w.e.f. 20th February, 2004 against the appellants request for interest for November 1997. Against this order of the Commissioner (Appeals) this appeal has been filed.
3. Heard both sides.
4. Shri Rajesh Chhibber, Advocate, the ld. Counsel for the appellant, pleaded that the amount of Rs.10.00 Lakhs whose refund was sought, had been paid by the appellant during investigation, that subsequently, when point of dispute was decided by the Commissioner (Appeals) in the appellants favour and this amount became refundable alongwith interest on the same should also be payable, that in this regard, he relies upon the judgment of Honble Madras High Court in the case of CCE, Chennai II vs. Ucal Fuel System Ltd. reported in 2014 (306) ELT 26 (Mad.), also the judgment of this Tribunal in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. Vs. Commissioner of Customs, Bangalore reported in 2009 (240) ELT 124 (Tri. Bang.) and that in view of the above submissions the impugned order refusing the interest from November, 1997 is not correct.
5. Shri Promod Kumar, ld. JCDR defended the impugned order and pleaded that though the appellant had paid an amount of Rs.10.00 Lakhs in November, 1997 towards their duty liability on adhoc basis during the period, when the matter being investigated, subsequently, the Addl. Commissioner by holding appellants activity as amounting to manufacture had confirmed the duty demand of Rs.17.59 Lakhs against that and had specifically appropriated the amount of Rs.10.00 Lakhs already paid by them, that once the amount paid is appropriated towards the appellants assessed duty liability, it is converted into the payment of Central Excise duty by the appellant towards their duty liability, that when this duty paid by the appellant became refundable in pursuance of the order dated 20th November, 2003 passed by the Commissioner (Appeals), the appellant, in accordance with the provisions of Section 11B, were required to file a refund application for its refund, which was filed by them only on 06.07.2004, that in terms of the Provisions of Section 11 BB, the interest liability of the department would arise only on expiry of the period of 3 months from the date of filing of the refund application i.e. 06.-07.2004, that appellant are not eligible for interest from November, 1997 the date of which the amount was paid and there is no provision for granting interest from this date, that in this regard he relies upon the Apex Courts judgment in the case of Ranbaxy Laboratories Ltd. Vs. Union of India reported in 2011 (273) ELT 3 (SC) wherein the Apex Court held that interest on delayed refund is payable under section 11 BB of Central Excise Act, 1944 on the expiry of a period of 3 months from the date of receipt of refund application under section 11B (1) and not from the date of the order of refund or the appellate order allowing such refund and that in view of this, there is no infirmity in the impugned order.
6. We have considered the submissions from both the sides and perused the records. There is no dispute that the appellant on 26.11.1997 had paid an amount of Rs.10.00 Lakhs under protest during investigation of the matter against them, as the Departmental officer was of the view that the appellants activity of filling hydrogen gas from pipeline into retail cylinder amounts to manufacture, subsequently, the additional Commissioner vide order dated 31.10.2002 confirmed the duty demand of Rs.17.59 Lakhs against appellant holding that their activity amounts to manufacture and specifically appropriated the amount of Rs.10.00 Lakhs already paid by them. Thus, once the Addl. Commissioner held that the appellant activity amounts to manufacture and confirmed the duty demand of Rs.17.59 Lkhs against them and appropriated Rs.10.00 Lakhs as payment towards their assessed duty liability, the Rs.10.00 Lakhs earlier paid by them becomes the payment of duty by the appellant towards assessed duty liability and ceased to be an amount paid on ad-hoc basis. The refund claim of the amount of Rs.10.00 Lakhs arose, when the Addl. Commissioners order was set aside by the Commissioner (Appeals) vide order in appeal dated 20th November, 2003, who held that the appellants activity does not amount to manufacture and set aside the Addl. Commissioners order dated 31.10.2002. Though on the basis of the Commissioner (Appeals)s order the amount of Rs.10.00 Lakhs earlier paid became refundable, the appellant in terms of the provisions of section 11B, were required to file an application for refund, which was filed only on 06.07.2004. In terms of Provisions of section 11B, even if, any refund arose in pursuance of an order-in-appeal passed by any appellate authority, the refund could not be granted suomotu. The claim in this regard is required to be filed by the assessee. The refund application was filed only on 06.07.2004. In terms of Section 11BB of the Central Excise Act, the interest liability of the Department for delay in payment of refund under Section 11B arises, only when there is delay beyond 3 months from the date of filing of the refund application. Since in this case refund application had been made on 06.07.2004, the interest liability would start from 07.10.2004 till the refund was paid to the appellant. The Commissioner (Appeals), however, has granted interest even from much earlier period from 20th February, 2004, against which it is the department which should be aggrieved and not the appellant.
7. We find that on this very issue the Apex Court in the case of Ranbaxy Laboratories Ltd. Vs. Union of India reported in 2011 (273) ELT 3 (SC) has held that interest for delayed refund was payable under section 11 BB from the date of expiry of 3 months period from the date of receipt of application and not from the date of appellate order allowing the refund. The judgment of Honble Madras High Court in the case of CCE, Chennai II vs. Ucal Fuel System Ltd. (Supra) and of the Tribunal in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. Vs. Commissioner of Customs, Bangalore (supra) cited by the ld. Counsel for the appellant are not application to the facts of this case. In view of this, we do not find any merit in this appeal. The appeal is dismissed.
[Dictated & Pronounced in the open Court].
(S.K.MOHANTY) (RAKESH KUMAR) MEMBER (JUDICIAL) MEMBER (TECHNICAL) Anita ?? ?? ?? ?? 0 8