Custom, Excise & Service Tax Tribunal
Oil India Ltd vs Commissioner Of Central Excise, ... on 15 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No E/575/07
(Arising out of Order-in-Original No. 10/CE(A)/GHY/07 date 30/07/2007 Passed by the Commissioner of Customs & Central Excise (Appeals), Guwahati.
FOR APPROVAL AND SIGNATURE
HONBLE SHRI H.K.THAKUR, MEMBER (TECHNICAL)
HONBLE SHRI P. K. CHOUDHARY 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
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
Oil India Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise, Dibrugarh.
Respondent (s)
Appearance:
Shri Ravi Raghavan or Sababdi Chatterjee, Advocate Shri Pankaj Kr. Patwari, Advocate the Appellant (s) Shri S. Mukhopadhyay, Suptd (AR) for the Respondent (s) CORAM:
HONBLE SHRI H.K.THAKUR, MEMBER (TECHNICAL) HONBLE SHRI P. K. CHOUDHARY MEMBER (JUDICIAL) Date of Hearing/Decision: 15.09.16 ORDER No.FO/A/76031/2016 Per Shri H.K.Thakur This appeal has been filed by the appellant against OIA No. 10/CE(A)GHY/07 dt 30/07/2007 passed by CCE (Appeals), Guwahati as first as first appellate authority.
2. Sh. Ravi Raghavan (Advocate), Ms Satabdi Chatterjee (Advocate) and Sh. P. K. Patwari (Advocate) appeared on behalf of the appellant. Sh. R. Raghavan submitted that appellant made pre-deposits of Rs. 2 Crore + Rs 3 Crore on 25/1/2000 as per the directions contained in stay order No. S/99-101/99-C dated 10/11/99 passed by this bench. That the issue was finally decided in favour of the appellant as per final order NO. 137-39/02-C dt 3/6/2002 on 16/8/03 & on 24/9/03 refund of pre-deposit made by the appellant, as per stay order dt 10/11/99, was paid to the appellant but no interest as per CBEC circular 802/35/2004-cx dt 8/12/2004 was paid to the appellant. That appellant vide letters dt 8/10/2003, 8/3/2004, 22/3/05, 2/7/05, 24/11/05, 26/11/05 & 29/03/2006 represented to pay interest but the same was not considered by department saying that Sec 35 F of the Central Excise Act 1944 does not allow payment of such interest. That vide letter dt 6/4/05 department, interalia, also expressed that no appeal has been filed against the earlier rejection orders and the same was reproduced by the Adjudicating Authority in his OIO dt 26/05/06.
2.1. That as per Para 4 of the CBEC Circular dated 8/12/2004 interest meter starts after 3 months from the date of the order passed by the Appellate authority / Court which in appellants case is 3/6/2002. Learned Advocate also relied upon the following case laws in support of his arguments.
(i) Afcons Infra structure Ltd. Vs Union of India [2006 (193) ELT 278 (A. P.)]
(ii) Arthanari Loom Centra Vs Secretary CBEC [2016 (332) ELT 778 (Mod.)]
(iii) Varsha Polymer Products Pvt. Ltd. Vs CC Kandle [2014 (301) ELT 128 (Tri-Ahmd.)]
(iv) CCE Vs LML Ltd [2014 (310) ELT 562 (Tri-Del)]
(v) Sheet Chand Industries Vs Union of India [2014 (313) ELT 503 (Del)]
(vi) Madura Coats Pvt. Ltd. Vs CCE Kolkata-IV [2012 (285) ELT 188 (Cal)]
(vii) Tata Chemicals Ltd. Vs. CCE Rajkot [2016 (334) ELT 133 (Tri. Ahmd.)] [Upheld by Gujarat High Court 2016 (334) ELT A 53 (Guj.)]
(viii) Hindustan Coca Cola Beverages Pvt. Ltd. Vs Union of India [2015 (324) ELT 299 (Guj.)] 2.2. That appellant is also entitled to interest upon interest as per following case laws.
(i) Sandvik Asia Ltd. Vs Commissioner [2006 (196) ELT 257 (S. C]
(ii) Hindustan Coca Cola Beverages Pvt. Ltd. Vs UOI [2015 (324) ELT 299 (Guj)]
3. Sh. S. Mukhopadhyay Suptd (AR) appearing on behalf of the Revenue argued that payment of interest on Rs. 2crore + Rs. 3crore deposits was rejected by order No. 58/Ref/ACD/2002/6022 dt 13/11/2003, as recorded in order No. (18) 1/ REF/ACD/98-P-II/1589 dt 26/5/06 and no appeal against such rejection of interest claim has been filed by the appellant. That due to non filing of appeal against order dt 13/11/2003 appellant now can not claim interest on pre-deposits made. Learned AR thus strongly defended OIA dated 30/7/07 passed by the first appellate authority.
4. As a counter to the submissions made by AR Learned Advocate of the appellant relied upon the Apex Courts decision in the case of Hindustan Polymers Co Ltd. Vs CCE Gunter [1999 (106) ELT 12 (S. C. ) & argued that department can not open a new case before the second appellate authority when OIA dt 30/7/07 was not appealed against by the Revenue. That earlier rejection of their interest request was only administrative Communications which were redressed by the appellant by writing several letters to the department that all the facts were included in grounds grounds B.1 to B. 4 of their appeal filed before the first appellate authority. That by giving specific findings on the issue in the last Para of OIA dt 30/7/2007 first appellant authority has accepted their grounds of appeal & neither an appeal has been filed by the Revenue against the said OIA No. 30/7/07 nor any cross objections have been filed when the same grounds are taken by the appellant as grounds C. 1 to C. 6 of the present appeal filed before CESTAT.
5. Heard both sides & perused the case records. The issue involved in the present proceedings primarily is whether appellant is entitled to interest on delayed refund of pre-deposit made as a result of stay order passed by this bench. It is observed from the case records that CBEC vide its Circular No. 802/35/2004-cx date 8/12/2014 issued from File No. 387/5/2001-JC, has issued following clarifications to the field offices.
4. Accordingly, the contents of the Circular No. 127/37/2000-CX. 8A dated 2-1-2002 [2002 (139) ELT T38], as to the modalities for return of the pre-deposits are reiterated. It is again reiterated that ion terms of Honble Supreme Courts order such pre-deposit must be returned within 3 months fom the date of the order passed by the Appellate Tribunal Court of other Final Authority unless there is a stay on the order of the Final Authority/ CESTAT/ Court, by a superior Court.
5. Delay beyond this period of three months in such cases will be viewed adversely and appropriate disciplinary action will be initiated against the concerned defaulting officers. All concerned are requested to note that default will entail an interest liability, if such liability accrues by reason of ay orders of the CESTAT/ Court, such orders will have to be complied with and it may be recoverable from the concerned officers. 5.1. It is a well accepted legal proposition that Circulars issued by CBEC are binding on the field formations. Secondly, a consistent stand has been taken by CESTAT & Superior Courts, as per appellants relied upon case laws mentioned in Para 2.1, above, that interest on delay of pre-deposit refunds attracts interest as per Para 4 of CBEC Circular dated 8/12/2004. On merit the observations made by the first appellate authority in the last Para of OIA dt 30/7/2007 are not sustainable & are required to be set aside. Appeal of the appellant to the extent of payment of interest on delayed payment is required to be allowed on merits.
6. Learned AR during the course of hearing also brought an additional argument that request of the appellant regarding interest on delayed pre-deposit refund was rejected under two separate orders both dt 13/11/2003 as contained in Para B of order dated 26/5/06 passed by the Adjudicating authority and that no appeal against the said orders of rejection was filed by the appellant. It is observed from the case records that orders dated 13/11/2003 were agitated by the appellant before the lower authorities considering the same as Administrations orders by writing suitable letters. At no stage department intimated the appellant that appeals against orders dated 13/11/2003 should be filed by the appellant. All these facts were placed by the appellant before the first appellate authority, as contained in grounds B.1 to B. 3 of the grounds of appeal filed before the first appellate authority. The same was entertained by the first appellate authority & on merits it was held by him that appellant is not entitled to interest on delayed refund of pre-deposit as interest under Sec 11BB of the Central Excise Act 1944 is not admissible to the pre-deposit made under Sec 35 F of the Central Excise Act 1944. If Revenue was aggrieved by the findings of the first appellate authority on merits then an appeal was required to be filed by the Revenue or a memorandum of cross objections in the appeal filed by the appellant should have been filed. A new case can not be made out by the department when no appeal against OIA dt 13/11/2003 was filed and this ground can not be entertained in view of the ratio laid down by Apex Court in the case of Hindustan Polymers Co Ltd. Vs CCE Guntur [1999 (106) ELT 12 (S. C.)].
7. On the issue of payment of interest on delayed interest payment, raised by the appellant, it is observed that in case of Sandvik Asia Ltd. Vs CIT-I Pune [2006 (196) ELT 257 (S. C.)] the issue before the Apex Court was inordinate delay of 12-17 years in payment of interest on refunds which is not the factual matrix in the present proceedings. Secondly, this aspect was not deliberated upon by the first appellate authority and can not be entertained at this stage.
8. In view of the above observations made in Paras- 5.1 & 6 and also the settled proposition of law, appeal filed by the appellant is allowed to the extent included in Para 5.1 of this order and the relevant date for calculating the interest will be 3 months from CESTAT order dated 3/6/02 as per Para- 4 of CBEC Circular dated 8/12/2004.
(Operative part of the order was pronounced in the open court.)
(P.K. CHOUDHARY) (H.K. THAKUR)
JUDICIAL MEMBER TECHNICAL MEMBER
T.K
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Appeal No.E/575/07