Allahabad High Court
Principal Commissioner Central Goods ... vs M/S Parle Agro Private Limited on 14 November, 2025
Author: Saumitra Dayal Singh
Bench: Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD
Neutral Citation No. - 2025:AHC:203089-DB
HIGH COURT OF JUDICATURE AT ALLAHABAD
CENTRAL EXCISE APPEAL No. - 18 of 2021
Principal Commissioner Central Goods And Service Tax
.....Appellant(s)
Versus
M/S Parle Agro Private Limited
.....Respondent(s)
Counsel for Appellant(s)
:
Ramesh Chandra Shukla
Counsel for Respondent(s)
:
Namit Kumar Sharma
Court No. - 3
HON'BLE SAUMITRA DAYAL SINGH, J.
HON'BLE INDRAJEET SHUKLA, J.
1. Heard Sri R.C. Shukla, learned counsel for the revenue and Sri Bharat Rai Chandani through Video Conferencing along with Sri Namit Kumar Sharma, learned counsel for the assessee.
2. Present appeal has been filed under Section 35 (G) of the Central Excise Act, 1944 (hereinafter referred to as the 'Act') arising from the order of the Customs Excise & Service Tribunal (hereinafter referred to as the 'Tribunal') dated 25.05.2021 in Appeal No.E//70628 of 2019 filed by the assessee and appeal no.E/70674 of 2019 filed by the revenue. By that order the Tribunal has dismissed the revenue's appeal against grant of interest from the date of deposit and has allowed the assessee's appeal with respect to rate of interest. It is thus provided for payment of interest from the date of deposit (on the refundable amount) at the rate of 12%.
3. The present appeal has been admitted on the following questions:-
"(I) Whether the Hon'ble Tribunal is correct in upholding the order dated 28.05.2019 of the Commissioner (Appeals) of CGST, NOIDA granting interest on refund amount from the date of deposit beyond the provisions of Section 11BB/Section 35FF of the Central Excise Act, 1944, as the case may be ?
(II) Whether the Hon'ble Tribunal is correct in granting compensatory interest at higher rate than the prescribed @ of 6% notified vide Notification No.67/2003-C.E. (NT) dated 12.09.2003 under the provisions of Section 11BB of the Central Excise Act, 1944 i.e. beyond the purview of the Statute ?"
4. The facts in brief are, the assessee was engaged in manufacture of excisable product known as Non-Alcoholic Beverages Base (hereinafter referred to as 'NABB'). On information received against the assessee, with respect to allegation of evasion of excise duty by under-booking and transferring cost on group companies of NABB and mis-utilizing the Modvat credit in relation to manufacture of flavour i.e. NABB, the factory and office premises of the assessee company came to be searched by the DGIE (Central Excise) on 20.10.1993. During the course of search, documents were seized, Panchnama was drawn and statements were recorded. That led to issuance of show cause notice dated 04.04.1994, demanding differential duty Rs.2,66,26,717/- for the period 01.03.1989 to 30.11.1993 and further Rs.26,48,860/- for the period April 1989 to September 1992.
6. Vide Order-in-Original dated 19.08.1996, redemption fine Rs.50 lacs and penalty Rs.2 crores was imposed on assessee. The matter reached the Tribunal. Vide its (earlier) order dated 31.01.2017 the Tribunal allowed the assessee's appeal with the following observation:-
"Having considered the rival contentions, we find that as held by Hon'ble Punjab and Haryana High Court and as earlier held by this Tribunal the amounts, which are deposited during the pendency of investigation and proceedings, if the dame are not adjudged as duty, fine or penalty is to be treated as Revenue deposit and the provisions of refund of duty shall not be applicable to the same. The amount which has been adjudged is as per the authority of law and the amount which is in excess of the adjudged amount if retained then such retention of said amount shall be without authority of law and Article 265 of Constitution of India has not authorized Revenue to retain such amount. In the present case, the penalty was reduced to Rs.10 lakhs. Therefore, we allow revenue to recover Rs.10 lakhs from Rs.1.5 crore which was deposited by the appellant and direct the Original authority to refund Rs.8,36,185/- and Rs.1,40,00,000/- and also pay the appropriate interest on the same. We do not pass any order in respect of bank guarantee since the matter was not subject matter of either the Order-in-Original or Order-in-Appeal impugned. We allow the appeal as held herein above."
(Emphasis supplied )
7. In that context, it is an undisputed fact, during the pendency of the investigation proceeding the assessee debited sum of Rs.4,33,450/- and Rs.4,32,505/- from the PLA on 26.11.1993. It deposited that and Rs.1.50 crore, on 27.06.1994. Those deposits are not in dispute.
8. Also, the order of the Tribunal dated 31.01.2017 (extracted above) was never challenged by the revenue. It has long attained finality.
9. In that fact background, the assessees's claim for refund came to be dealt with by the Assistant Commissioner, Central Excise & Service Tax, Division-IV, NOIDA, vide order dated 30.01.2018. Though the said authority found the petitioner entitled to refund Rs.1,48,36,185/-, being part of the amount deposited earlier, under protest, it chose to award interest of Rs.99,40,244/- computed at the rate of 6% from the expiry of three months from the date of refund claim made by the assessee, on 02.09.2025.
10. That order was challenged by the assessee in appeal. Vide order dated 28.05.2019 the Commissioner (Appeal), Noida partly allowed the appeal applying the principle laid down by the Andhra Pradesh High Court in Goldstone Engineering Ltd. vs. Union of India , 2005 (181) ELT 11 (AP) and Madras High Court in Commissioner of C.Ex.Chennai-II vs. Ucal Fuel Systems Ltd, 2014(306) E.L.T. 26(Mad).
11. The appellate authority also took note of the earlier orders of the Tribunal in Toyota Kirloskar Auto Parts Pvt. Ltd. vs. Commissioner of Customs Bangalore, 2009 (240) ELT 124 (Tri.-Bang.).
12. That order of the appellate authority was appealed against, both by the revenue and the assessee. While the revenue was opposed to the award of interest from the date of deposit, the assessee was aggrieved by award of interest at the lesser rate of 6%. Vide its impugned order, the Tribunal has allowed the assessee's appeal and dismissed the revenue's appeal.
13. Learned counsel for the revenue would submit, the assessee is not entitled to any interest up to the expiry of three months from the date of claim. He has referred to and relied on the provisions of Section 11BB ready with Section 11B of the Act and the decision of Hon'ble Supreme Court in Ranbaxy Laboratories Ltd. vs. Union of India & others, 2011 10 SCC 292 and Union of India and others vs. M/s Hamdard (Waqf) Laboratories (2016) 6 SCC 621. Also, he has submitted, there was no warrant to award interest at the higher rate 12%.
14. On the other hand, learned counsel for the assessee would contend, the issue of payment of interest from the date of deposit stood decided and concluded against the revenue in the earlier order of the Tribunal dated 31.01.2017, passed in the appeal arising from the Adjudication Order dated 19.08.1996. That order was never appealed. Therefore, the revenue became liable to pay interest in terms of that order.
15. Second, no amount was ever deposited by the assessee towards admitted duty liability or against any amount of excise duty determined by the Adjudication Authority, or other authority under the Act . To the extent the deposits made had been forced on the petitioner, under threat of adverse adjudication, merely because the order of refund may have been passed later, the assessee cannot be denied interest that is a natural assertion on capital.
16. As to the rate of interest it has been submitted that the findings of the Tribunal is well considered and calls for no interference.
17. Having heard learned counsel for the parties and having perused the record, in the first place , it is not shown to us that the assessee had deposited any amount (later directed to be refunded), either against admission of duty (against self clearance of goods), or against any adjudicated demand or against proposed demand of excise duty (against any show cause notice). That character of deposit is not shown to exist, in the present facts.
18. More crucially, it is not open to the revenue to now contest that nature of deposit, in view of the finding of the Tribunal recorded in its order dated 31.01.2017 passed in appeal arising from adjudication order/Order-in-Original dated 19.08.1996. Therein, relying on the decision of Punjab & Haryana High Court the Tribunal clearly concluded that the amount deposited by the assessee during pendency of investigation and adjudication cannot be treated as deposit made against duty, fine or penalty imposed. It further opined that such deposit remained a revenue deposit to which the statutory provisions for refund of duty may not apply.
19. Based on that reasoning, the Tribunal provided for refund of the excess deposit of Rs.1,48,36,185/-, together with interest. Not only the Tribunal treated the deposit made by the assessee to be a revenue deposit not amenable to the provisions for refund of duty, but in clear terms it further provided for payment of interest thereon, treating that liability to have been incurred by the revenue in facts found by it.
20. Seen in that light, the interest liability incurred by the revenue does not flows in terms of the order dated 30.10.2018 passed by the Assistant Commissioner. It is not traceable to Section 11BB of the Act. For the reasons noted above that liability has been incurred by virtue of revenue receipt of the assessee deposited under force or in circumstances other than those governing payment of duty, fines and penalties. To that extent the finding of the Tribunal giving rise to this appeal cannot be faulted.
21. The decision of Hon'ble Supreme Court in the case of Ranbaxy (supra) is not in favour of the revenue. In fact is not on the point. There after making deposits of amounts towards payment of duty, the assessee had claimed rebate. The entitlement to rebate inheres in it the liability to pay duty. In other words the claim for rebate may arise only where there pre-exists a liability to pay duty. That liability not only existed that had been discharged by Ranbaxy. Later, the claim for refund had been made.
22. Similarly in Hamdard (supra) after payment of duty the claim for refund had been made, which was allowed. As in the case of rebate so in refund, claim arose as a result of classification dispute. The duty liability pre-existed.
23. In the present case duty liability has not been shown to pre-exist as may warrant any further consideration. Suffice to note the decisions in Ranbaxy (supra) and Hamdard (supra) are wholly distinguishable to the facts of present case.
24. In view of the above discussion question no.1 is answered in the affirmative i.e. against the revenue and in favour of the assessee.
25. Insofar as question no.2 is concerned, in the instant case the Tribunal has discussed all relevant notifications and, thereafter, reached the conclusion that the interest rate has varied from 6% to 18%. Considering the long duration of retention of the revenue receipt of the assessee, it has awarded 12%. We do not find any substantial question of law has arisen with respect to payment of rate of interest. Suffice to note that the amount was forcibly extracted from the assessee in the year 1994 and it came to be refunded in the year 2018 after 24 years.
26. In view of such facts and law the question no.2 is answered accordingly.
27. Consequently, the appeal is dismissed. No order as to costs.
(Indrajeet Shukla,J.) (Saumitra Dayal Singh,J.) November 14, 2025 S.P.