Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, Pune vs Bajaj Auto Ltd on 26 March, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. E/298/08 (Arising out of Order-in-Appeal No. PI/BBP/25/08 dated 16.1.2008 passed by Commissioner of Central Excise (Appeals), Pune-I) For approval and signature: Hon'ble Mr. P.G. Chacko, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No 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 : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Commissioner of Central Excise, Pune Appellant Vs. Bajaj Auto Ltd. Respondent Appearance: Shri Manish Mohan, Authorised Representative (SDR), for appellant Shri U.K. Godbole, Senior Manager (Excise), for respondent CORAM: Hon'ble Mr. P.G. Chacko, Member (Judicial) Date of Hearing: 26.3.2009 Date of Decision: 26.3.2009 ORDER NO.................................
After examining the records and hearing both sides, I find that this appeal of the Revenue has been filed with the limited prayer for restricting interest on refunded pre-deposit to the period from the date of filing of the refund claim (28.5.2004). The respondent became entitled to refund of pre-deposit when their appeal was allowed by this Tribunal as per final order dated 15.10.2003. On 28.5.2004, they filed a refund claim, which was allowed and accordingly, the amount was refunded to them on 22.6.2006. The refund sanctioning order, however, was silent on the party's claim for interest. Hence they preferred an appeal to the Commissioner (Appeals), which came to be rejected. The party then approached this Tribunal, which remanded the matter to the Commissioner (Appeals) with a direction to reconsider the claim of interest in the light of a decision of the Supreme Court and a circular of the Board. Accordingly, the learned Commissioner (Appeals) passed order allowing interest on the refunded amount of pre-deposit for the period beyond three months from the date of the Tribunal's earlier order dated 15.10.2003. The present appeal of the Revenue is against this order of the Commissioner (Appeals).
2. The circular dated 8.12.2004 of the CBEC, referred to in the impugned order, instructed the departmental officers to return pre-deposits within three months from the date of the order passed by the appellate Tribunal unless there was a stay of operation of such order by a superior court. It was on this basis that the lower appellate authority held that the party is entitled to claim interest for the period beyond the said period of three months. This decision of the lower appellate authority is in keeping with the principle embodied in Section 11BB of the Central Excise Act. Section 11BB provided for payment of interest on delayed refunds from the date immediately after the expiry of three months from the date of refund claim till the date of refund of duty. Explanation to Section 11B laid down that, where an order of refund was made by the Commissioner (Appeals), the appellate Tribunal or any court against an order of the Assistant Commissioner under sub-section (2) of Section 11B, the order passed by the Commissioner (Appeals), the appellate Tribunal or, as the case may be, by the court, should be deemed to be an order passed under the said sub-section (2) for the purposes of Section 11BB. Applying this principle to the facts of the instant case, one would find that the Tribunal's order dated 15.10.2003 is the relevant event, with reference to which the period for payment of interest on the refunded pre-deposit amount should be computed. Accordingly, a party who receives refund of pre-deposit belatedly, can claim interest on that amount for the period beyond the period of three months from the date of the Tribunal's order, on the basis of which refund is claimed. The Board's circular only clarified this legal position and, therefore, the date of issue of the circular is irrelevant. What is relevant is the date on which the Tribunal passed the order giving rise to a cause of action for claim of refund of pre-deposit. Accordingly, the respondents can claim interest on the refunded pre-deposit for the period from 15.1.2004 till 22.6.2006, as held by the lower appellate authority.
3. The impugned order is sustained and this appeal is dismissed.
(Pronounced in Court) (P.G. Chacko) Member (Judicial) tvu 1 3