Custom, Excise & Service Tax Tribunal
Continental Engines Pvt Ltd vs Commissioner, Central Excise & ... on 10 May, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH COURT NO.IV
EXCISE APPEAL NO. 52285/2021
Arising out of Order-in-Appeal No. 42 (SM)/CE/JPR/2021 dated 26.02.2021
passed by the Commissioner (Appeals) Central Excise & CGST, Jaipur]
M/s.CONTINENTAL ENGINES PVT LTD
APPELLANT
(100%EOU) A-88, RIICO Industrial Area
Bhiwadi, Distt. Alwar.
Vs.
COMMISSIONER (Appeals), RESPONDENT
CENTRAL EXCISE & CGST, JAIPUR I NCRB, Statue Circle, Jaipur.
APPEARANCE:
Shri Priyesh Kasliwal, Advocate for the Appellant Shri Ishwar Charan, Authorised Representative for the Department CORAM:
HON'BLE DR. MRS RACHNA GUPTA, MEMBER (JUDICIAL) DATE OF HEARING /DECISION: MAY 10, 2022 FINAL ORDER No. 50425/2022 PER DR. RACHNA GUPTA The appellant herein are engaged in manufacture of automotive components. They had procured imported as well as indigenous raw material for the purpose. During the course of manufacture of their final product certain quantity of scrap was generated which was cleared by the appellant under domestic E/52285/2021 tariff area on payment of concessional duty @ 50% under notification No. 23/2003 CE. However, department vide 4 Show Cause Notices of the year 2005-2006 and 2008 denied the appellant to clear the scrap under DTA and accordingly it proposed a total demand of Rs. 1,04,55,307/- with interest and penalties. The said demand was confirmed by both the adjudicating authorities. The said demand was initially confirmed vide Order in Original dated 29.12.2005. Commissioner (Appeals) rejected the appeal against the said order for want of pre-deposit. This Tribunal vide Final Order No. 180/2007 EX dated 9.5. 2007, had remanded the matter to be decided on merits. The demand was still confirmed by the Departmental authorities.
Being aggrieved the appellant filed this appeal depositing Rs.60 lakh as an amount of pre-deposit for filing these appeals. The said appeals were rejected by Commissioner Appeals) vide Order in appeal dated 24.11.08. However, this Tribunal vide Final Order Nos. 50358-50361/2017 dated 09.01.2017 had allowed the appeals. Pursuant thereto the refund claim of Rs.60 lakh as was paid as 'pre-deposit' in respect of the appeals filed on 08.05.2017 was prayed to be refunded along with interest.
However, the Original Adjudicating Authority vide Order No. 96/17 dated 07.08.2017 had sanctioned the refund claim of Rs.60 lakh but has adjusted Rs.38,79,769/-. The remaining amount Rs.21,20,231/- was transferred to the appellant account however without any amount of interest. The findings of Original Adjudicating Authority that since the refund was sanctioned within three months, assessee was not entitled to interest, was challenged before the Commissioner (Appeals). However the said Order-in-Original has been upheld by Commissioner (Appeals) vide his order No. 492/2018 dated 26.11.2018. Being aggrieved the appellant is before this Tribunal.
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2. I have heard Shri Priyesh Kasliwal, learned Counsel for the appellant and Shri Iswhar Charan learned Authorised Representative for the respondent.
3. Learned Counsel has mentioned that the amount in question is not at all the amount of duty rather it was the amount of pre-deposit paid at the time of filing respective appeals. Hence the provisions of time limit of three months for sanctioning the said amount is not applicable to the impugned amount. It is further mentioned that the amount of Rs.38,79,769/-. has also been wrongly adjusted to the amount of Rs.60 lakh which was the amount to be pre deposited. It is mentioned that the amount as a whole was to be transferred to the appellant along with the interest that too from the date of payment of the said amount. Learned Counsel has laid emphasis on the following decisions :
1. Goldstone Engineering Ltd vs Union of India [2005 (181) E.L.T. 11];
2. Sandvik Asia Ltd. vs. Commissioner of Income Tax, 1, Pune [2006 (196) E.L.T. 257];
3. Surinder Singh Versus Union Of India [2006 (204) E.L.T. 534];
4. Binjarjka Steel Tubes Ltd. Vs. CCE [2007 (218) E.L.T. 563];
5. Omjai Bhavani Silk Mills Pvt. Vs. CCE [2009 (243) E.L.T. 560];
6. Pace Marketing Specialties vs. Commissioner of Central Excise vs. Commissioner of Central Excise and Service Tax Panchkula [2011 (274) E.L.T. 13];
7. Amidhara texturising Pvt.Ltd CCE [2012 (278) E.L.T. 257];
8. Sundeep Electrodes Pvt.Ltd. Vs. CCE CESTAT Allahabad Final Order NO. A/70867-70868/2016;
9. Ebiz. Com Pvt. Ltd. vs. Commissioner of Central Excise, Customs & S.T. [2017 (49) S.T.R. 389];
10 CNH Industrial India Pvt. Ltd. Vs. CCE MANU/CN/0190/2018;3
E/52285/2021
11. M/s Parle Agro Pvt. Ltd VS CCE Excise Appeal No.70628 of 2019 Allahabad;
12. Riba Textiles Vs CCE Excise Appeal No.60446 of 2018;
13. Team Hr services pvt. Ltd. Versus union of India 2020 (38) G.S.T.L. 457;
14. J.K. Cement Works Vs. CCE MANU/CE/0021/2021; and
15. Jovex International Vs CCE MANU/CE/0205/2021 Accordingly, order under challenge is prayed to be set aside and appeal is prayed to be allowed.
4. Per contra relying upon order under Challenge No. 42/2021 dated 26.2.2021, the Departmental Representative has laid emphasis specifically on paragraph 11 therein. Impressing upon no infirmity in the said findings, the appeal is prayed to be dismissed.
5. After hearing the rival contentions, it is observed that there is no denial for the amount in question of Rs.60 lakh to be the amount of pre-deposit. The said amount has been admittedly paid as follows:
Sl. No. RG-23 Pt-II Entry No. & date Amount debited(Rs.) i. 1152 dated 13.08.2008 20,00,000/-
ii. 22 dated 08.05.2007 10,00,000/-
iii. 105 dated 28.06.2007 10,00,000/-
iv. 55 dated 11.07.2007 10,00,000/-
v. 1472 dated 01.10.2008 10,00,000/-
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E/52285/2021
6. Commissioner (Appeals) in para 11 thereof has held that appellant is entitled to interest from the date of expiry of three months till the date of refund of said amount from the date of communication of the order which in the present case is from 7.02.2017. It is observed that the concept of said three months has come under section 11BB of Central Excise Act which talks about the interest on delayed refunds. The pending amount of said provisions makes it clear that section 11B is applicable for such amount which was the amount of duty but was subsequently ordered to be refund. Commissioner (Appeals) himself has admitted the applicability of section 35FF, for the amount paid to be refunded being the amount of pre-deposit. However has invoked the pre-amended provision as was in existence prior to August 06, 2014. However the admitted fact of the present case is that the appellant become entitled for the refund pursuant to the order of this Tribunal dated 9.1.2017 i.e. the cause of action to claim the impugned refund arose in favour of the appellant after 6.8.2014 when section 35 FF got amended. Amended section reads as follows:
"[SECTION 35FF. Interest on delayed refund of amount deposited under section 35F. -- Where an amount deposited by the appellant under section 35F is required to be refunded consequent upon the order of the appellate authority, there shall be paid to the appellant interest at such rate, not below five per cent. and not exceeding thirty- six per cent. per annum as is for the time being fixed by the Central Government, by notification in the Official Gazette, on such amount from the date of payment of the amount till, the date of refund of such amount."
7. A perusal makes it clear that the amount of pre-deposit is to be refunded along with the interest which was not below 5 % and shall not exceed 36%. No concept of any time limit is being mentioned in the said provision. Hon'ble Apex Court also has 5 E/52285/2021 settled this issue in the case of Sandvik Asia Ltd. reported as [2006 (196) ELT 257 (SC)] holding the assessee entiled for interest along with the refund of the amount which he was not liable to pay to the Department.
8. I also endorse the following findings of the Tribunal in the case of M/s. Parle Agro Pvt Ltd. reported as (2021-TIOL-306- CESTAT-ALL) as under:
"30. In the present case, the provisions of section 11B of the Excise Act would not be applicable. This is for the reason that the appellant was not claiming refund of duty. The applicant, as noticed above, had claimed refund of the revenue deposit. Such a finding has also been clearly recorded by the Tribunal in the order dated 31.01.2017, which order has attained finality.
31. Section 11D of the Excise Act deals with duties of excise collected from the buyer to be deposited with Central Government. It provides that every person who is liable to pay duty and has collected any amount in excess of the duty assessed from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government.
32. Section 11DD of the Excise Act deals with interest on the amount collected in excess of the duty. It provides that where an amount has been collected in excess of the duty from the buyer of such goods, the person who is liable to pay such amount shall, in addition to the amount, be liable to pay interest at such rate not below ten per cent., and not exceeding thirty-six per cent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette.
33. There is no provision in the Excise Act, which deals with refund of revenue deposit and so rate of interest has not been prescribed, when revenue deposit is required to be refunded."
9. In view of the entire above discussion, I hold that the appellant was entitled for the disbursement of entire amount of Rs.60 lakh being the amount of pre-deposit. The adjustment of Rs.38,79,769/- was absolutely unreasonable and unjustified for being not pertaining to the impugned issue. Appellant is simultaneously entitled for the interest to be calculated at the 6 E/52285/2021 rate of 12% from the date of payment of the said amount to be calculated in accordance with the table showing date of deposit as mentioned above.
10. In view of these findings the order under challenge is hereby set aside. Appeal stands allowed.
(DR. RACHNA GUPTA ) MEMBER (JUDICIAL) ss 7