Custom, Excise & Service Tax Tribunal
Bata India Ltd vs Cce, Delhi-Iv on 2 August, 2017
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017 COURT No. II APPEAL No. E/56519/2013 [Arising out of Order-in-Appeal No. 113/CE/Appeal/DLH-IV/2012 dated 17.12.2012 passed by the Commissioner of Central Excise (Appeals), Delhi-IV, Faridabad.] Date of hearing: 02.03.2017 Date of decision:02.08.2017 For approval and signature: Honble Mr. Devender Singh, Member (Technical) ======================================
Bata India Ltd. :
Appellant(s) VS CCE, Delhi-IV.
:
Respondent(s) ====================================== Appearance:
Smt. Karati Somani, Advocate for the Appellant(s) Sh. V.K. Trehan, AR for the Respondent(s) CORAM:
Honble Mr. Devender Singh, Member (Technical) Final Order No. 61455/2017 Per : Devender Singh The appellants are in appeal against the impugned order.
2. The brief facts of the case are that the appellants had filed a refund claim amounting to Rs. 20,00,000/- of pre-deposit of Central Excise duty made as a condition precedent to the hearing of their Appeal No. ER No. 52/98 in terms of Order No. S-228/CAL/98 dt. 22.05.1998 passed by the Honble Customs, Excise & Service Tax Appellate Tribunal, Kolkata. The Honble CESTAT had allowed the appeal vide their Order No. A-350/KOL/2010 dt. 26.05.2010 and consequently the appellants filed the above refund claim on 19.09.2011 alongwith the relevant documents. The adjudicating authority rejected refund claim as time barred. Aggrieved from the same, the appellants went in appeal before the Ld. Commissioner (Appeals). Vide order dt. 30.11.2012, the Ld. Commissioner (Appeals) rejected their appeal. Aggrieved from the same, the appellants have filed this appeal.
3. Ld. Advocate for the appellant submits that the limitation prescribed Under Section 11B of the Central Excise Act (the Act) is not applicable to the pre-deposit made under Section 35 of the Act since the pre-deposit is not in the nature of duty and is in the nature of pre-deposit. She submits that it is settled legal position that the provisions of Section 11B of the Act are not applicable to refund of pre-deposits made by the assessee. In this regard she relied upon the following case laws:-
1. Suvidhe ltd. Vs. UOI, 1996 (82) ELT 177 affirmed by the Supreme Court in UOI Vs. Suvidhe ltd., 1997 (94) ELT A154 (SC).
2. Shree Ram Food Industries Vs. Union Bank of India, 2003 (152) ELT 285 (Guj.).
3. CCE Vs. Crompton Greaves Ltd., 1999 (83) ECR 329 (Tri.-Mum).
4. Supermax Personal Care P. Ltd. Vs. CCE & ST, Mumbai, 2016 (337) ELT 315 (Tri.-Mum).
5. Konark Cylinders Vs. CCE, BBSR, 2002 (144) ELT 454 (Tri.-Kol)
6. Gujarat State Fertilizers & Chem. Ltd. Vs. CCE, Vadodara 2005 (186) ELT 607 (Tri.-Mumbai).
7. Nelco Limited Vs. UOI 2002 (144) ELT 56 (Bom.).
8. CCE, Chennai-III Vs. Consul Consolidated Pvt. Ltd. 2002 (141) ELT 792 (Tri. Chennai).
9. Kunj Behari Dye Chem Pvt. Ltd. Vs. CCE 2009 (241) ELT 84 (Tri.-Bang.).
10. Nestle India Ltd. Vs. CCE 2003 (154) ELT 567 (Kar.).
11. Konark Cement & Asbestos Ltd. Vs. CCE 2000 (120) ELT 634 (Tri.)
12. CCE Vs. Pepsi Foods Ltd. 2000 (118) ELT 536 (Tri.)
13. Parle International Ltd. Vs. UOI 2003 TIOL23-HC-AHM-CX.
She further submitted that Section 35 of the Act distinguished between amount paid under Section 35 of the Act and amount paid as duty and interest. Her contention is that amount paid under Section 35 of the Act is to be refunded under Section 35 FF of the act. The Ld. Advocate also relied on the Board's Circular No. 984/8/2014-CX dt. 16.09.2014. Ld. Advocate also submits that the amount of Rs. 20 Lakhs was paid under protest and hence the limitation under Section 11B is not applicable. Ld. Advocate also pleaded for payment of interest for pre-deposit under Section 11BB of the Act as per the provisions contained in Section 35FF of the Act. It was also argued by the Ld. advocate that if the pre-deposit was duty, Section 35FF was not needed as Section 11BB would have taken care of the same.
4. Ld. AR reiterated the findings in the order of the Ld. Commissioner (Appeals) and relied upon the following case laws:-
1. Harinagar Sugar Mills Ltd. Vs. State of Bihar 2004 (176) ELT 48(SC).
2. CCE, Mumbai Vs Reliance Industries Ltd. 2003 (152) ELT 379 (Tri.-Mumbai).
3. CCE, Hyderabad Vs. ITC Ltd. 2005 (179) ELT 15 (SC).
4. Afcons Infrastructure Ltd. Vs. CCE, Vishakhapatnam 2006 (204) ELT 333 (Tri.- Del.).
5. Miles India Ltd. Vs. Assistant Collector of Customs 1987 (30) ELT 641 (SC).
6. Collector of C.E., Chandigarh Vs. Doaba Co-operative Sugar Mills 1988 (37) ELT 478 (SC).
7. Mafatlal Industries ltd. Vs. Union of India 1997 (89) ELT 247 (SC).
8. Mahavir Aluminium Ltd. Vs. Collector of Central Excise, Jaipur 1999 (114) ELT 371 (SC).
5. Heard the parties and perused the records.
6. I find that the issue of applicability of Section 11B on deposits made under Section 35F is no longer res integra and has been decided by Hon'ble Bombay High Court in the case of SUVIDHE Ltd. Vs. UOI (supra) wherein Honble High Court held as below:-
2.Show cause notice issued by the Superintendent? (Tech.) Central Excise to the petitioner to show cause why the refund claim for Excise Duty and Redemption fine paid in a sum of Rs. 14,07,410/- should be denied under Section 11B of the Central Excise Rules and Act, 1944 (sic) is impugned in the present petition. The aforesaid amount is deposited by the Petitioners not towards Excise Duty but by way of deposit under Section 35F for availing the remedy of an appeal. Appeal of the petitioners has been allowed by the Appellate Tribunal by its Judgment and order passed on 30th of November, 1993 with consequential relief. Petitioners prayer for refund of the amount deposited under Section 35F has not received a favourable response. On the contrary the impugned show cause notice is issued why the amount deposited should not be forfeited. In our judgment, the claim raised by the Department in the show cause notice is thoroughly dishonest and baseless. In respect of a deposit made under Section 35F, provisions of Section 11B can never be applicable. A deposit under Section 35F is not a payment of Duty but only a pre-deposit for availing the right of appeal. Such amount is bound to be refunded when the appeal is allowed with consequential relief. The appeal filed by the Union of India against the said judgment was dismissed by the Hon'ble Supreme Court (1997 (94) ELT A.159) (SC)).
7. I also find that the Central Board of Excise and Custom had issued a circular after taking into the account the judgment in the case of Nestle India Ltd. Vs. CCE (supra) and stating that the law relating to refund of pre-deposit had become final.
8. Considering that there are High Court decisions on this issue, they would prevail over the decision of the Tribunal in the case of CCE, Mumbai Vs. Reliance Industries (supra). Besides, CBEC itself has taken the view that pre-deposit is not in the nature of duty, the limitation under Section 11B cannot apply in the present case.
9. The judgment cited by Ld. AR in respect of refund of pre-deposit are not applicable for the following reasons.
1. The case of Harinagar Sugar Mills Ltd. Vs. State of Bihar (supra) is not in relation to Central Excise and is in the context of Bihar Agricultural Produce Markets Act, 1960. It is settled position that judgments of another Act cannot be relied upon to interpret the provisions of Central Excise Act.
2. As for the Tribunal judgment in the case of CCE, Mumbai Vs Reliance Industries Ltd. (supra), the same preceded the Board Circular dt. 08.12.2004, which was issued pursuant to the order of the Honble Supreme Court dt. 21.09.2004. In terms of the said circular, refunds of pre-deposit are in the nature of other than duty.
3. The judgment of Mahavir Aluminium Ltd. Vs. Collector of Central Excise, Jaipur (supra) was in the context of bar of unjust enrichment.
4. The judgment of Miles India Ltd. Vs. Assistant Collector of Customs (supra) relate to the payment of duty under mistake of law which is not the case here. Similarly, the judgment of Collector of C.E., Chandigarh Vs. Doaba Co-operative Sugar Mills (supra) is not in relation to refund of pre-deposit and hence is inapplicable.
5. The Judgment of Mafatlal Industries ltd. Vs. Union of India (supra) does not apply to the facts of this case as it deals with refunds under Section 11B of the Central Excise Act, 1944. The refund of pre-deposit as condition of hearing in appeal is not treated as refund falling under Section 11B as per the Board Circular dt. 02.01.2002.
10. The appellants have sought the interest on refund under Section 11BB of the Act read with Section 35FF. I find that the question of interest on refund of pre-deposit was examined in detail by this Tribunal in the case of AFCONS Infrastructure Ltd. CCE, Visakhapatnam 2006 (204) ELT 333 (Tri. Del.) wherein this Tribunal took the following view:-
8.4?Section 11BB, referring to the provisions of Section 11B (2) under which refund is ordered, lays down that if the duty ordered to be refunded is not refunded within three months from the date of the receipt of the application under sub-section (1) of Section 11B, the applicant will be paid interest, as indicated thereunder on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty amount.
8.5?The explanation which has relevance to the present dispute reads as under :-
11BB. - Interest on delayed refunds ..........................
Explanation. - Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal or any court against an order of the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, under sub-section (2) of section 11B, the order passed by the Commissioner (Appeals), Appellate Tribunal or, as the case may be, by the court shall be deemed to be an order passed under the said sub-section (2) for the purposes of this section. This explanation appears to have been incorporated because Section 11B(2) refers to order of refund made by the Assistant Commissioner or Deputy Commissioner of Central Excise. In view of this explanation even when the order of refund is made by the Appellate Tribunal or any Court against an order of the Assistant Commissioner or Deputy Commissioner which was made under sub-section (2) of Section 11B, such Appellate order of the Tribunal or the court shall be deemed to be an order passed under the said sub-section (2) (of Section 11B) for the purpose of this section. Therefore, in cases where the appeals are filed in the Appellate Tribunal against the order rejecting the claim for refund wholly or partially rejecting the claim of refund with interest, the order of the Appellate Tribunal shall be deemed to be an order passed under sub-section 11B(2) for the purposes of award of interest on delayed refunds under Section 11BB. In other words, even in an appeal which arises before the Tribunal from any order partially denying the claim of refund with interest, when the interest is to be awarded it will have to be in consonance with the provisions of Section 11BB and the interest shall be paid to such applicant at the rate indicated on such duty, from the date immediately after the expiry of three months from the date of receipt of such application for refund till the date of refund of such duty. There is absolutely no scope under the said provisions either for Assistant/Deputy Commissioner or the Appellate Tribunal or Court to award interest on the refund amount from any date earlier than the date immediately after the expiry of three months of the date of receipt of such application. The appellant would, therefore, not be entitled to interest on the refund claim from 15-10-1994, being the date on which the deposit of partial amount of duty demanded was made by the appellant under Section 35F of the Act for the hearing of the appeal.
8.6?Admittedly, the refund claim was sanctioned within three months from the date of the application for refund. Obviously, therefore, the appellant was not entitled to claim interest on the refund of Rs. 4,30,000/- being the pre-deposit of the duty demanded under the order, which was challenged before the Tribunal under Section 35F of the Act. The Tribunal, while entertaining the claim of interest of the present nature, cannot overlook the provisions of Section 11BB of the Act, which would apply in all cases of interest on delayed refunds. The decision in Kuil Fireworks Industries in which the Honble the Supreme Court while directing the refund of duty, awarded interest cannot generate power to award interest for the Tribunal contrary to the provisions of Section 11BB of the Act since the award of interest under that decision is obviously relatable to the plenary powers of the Supreme Court. Even the award of interest by the High Courts in exercise of their writ jurisdiction will not constitute a ratio creating power of the Tribunal or revenue authorities to award interest contrary to the provisions of Section 111BB on the delayed refunds. As held by the Honble the Gujarat High Court Padmanabh Silk Mills v. Union of India (supra), where specific application is made under Section 11B(2) of the Central Excise Act, 1944 for interest on delayed refund then the same had to be considered and decided by the authority in the light of the provisions of Section 11B(2) as well as Section 11BB of the Act, as Section 11BB provides interest for delayed refund of duty and not of deposit. It was held that the authority was, therefore, right in rejecting the refund on delayed refund. The Honble High Court held in paragraph 11 of the judgement that, from a bare reading of Section 11B(2) and 11BB of the Act, it was clear that if the concerned authority was satisfied on the claim of the applicant for refund, then the refund was to be paid within three months from the date of the receipt of the application, and if it was not so paid then interest had to be paid on it under Section 11BB of the Act. This decision of the Honble Gujarat Court fortifies the conclusion that the claim for interest made by the appellant in respect of the refund of the deposited amount was not maintainable under Section 11BB of the Act, since the refund application of the appellant was disposed of within three months of its receipt.
9.?For the foregoing reasons, there is no warrant for interfering with the impugned order which is made for valid reasons. The appeal is, therefore, dismissed. Following the above judgment of the Tribunal, I hold that interest on refund under Section 11BB is not applicable in the present case as the show cause notice dt. 16.12.2011 for rejection of refund claim of the appellant was issued within three months of its receipt.
11. In the result,
(i) Refund of pre-deposit made in terms of Tribunal Order No. S-228/CAL/98 dt. 22.05.1998 is allowed.
(ii) Prayer for interest on the above pre-deposit is rejected.
12. The appeal is disposed of in above terms.
(Order pronounced in the Court on 02.08.2017) Devender Singh Member (Technical) NS 4 Appeal No. E/56519/2013-CHD