TMI Blog2010 (4) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 44,53,516/- of the appellants. Being aggrieved by the said order rejecting the major part of the claim of interest the appellants filed the said appeal before the Commissioner (Appeals) which came to be dismissed by the impugned order. Hence, the present appeal. 3. The appellants are engaged in manufacture of oxygen and dissolved acetylene gases classifiable under chapter heading 2804 40 00 and 2901 29 12 respectively of the First Schedule to the Central Excise Tariff Act, 1985. The appellants had applied for registration as small scale industries with DIC, Sidhi. The appellant s request for claim of exemption from payment of duty under Notification No. 175/86-C.E., dated 1-3-1986 came to be rejected on account of the absence of registration with DIC, Sidhi as SSI unit. Consequently appellants were required to pay normal rate of duty on their final product, which the appellant did, under protest. The request for the SSI unit registration was not favourably answered for a long time by DIC, Sidhi. Therefore, the appellants approached the High Court of Madhya Pradesh. The High Court decided the matter in favour of the appellants and directed the Director of Industries to reconsid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Steels Ltd. v. C.C. C.E. (A), Hyderabad reported in 2008 (225) E.L.T. 472 (Tri.) = 2009 (16) S.T.R. 228 (Tri.-Bang.), Collector of Customs (Preventive) v. Kuljit Singh reported in 1993 (67) E.L.T. 238 (Cal.), Assistant Collector of C.Ex. v. Calcutta Chemical Company Ltd., reported in 1992 (62) E.L.T. 511 (Cal.), Jyoti Limited, Baroda v. Union of India and Another reported in 1979 (4) E.L.T. (J546) (Guj.) in support of his contention for justification for the grant of interest on the amount which was lying with the respondent. 5. Learned DR on the other hand submitted that the decisions which are sought to be relied upon on behalf of the appellants are either in relation to the provisions of law comprised under Income Tax Act or delivered in a totally different situation, and, therefore, cannot be of any help to the appellants to justify grant of interest in the matter in hand. Drawing our attention to the decision in the matter of Hari Khemu Gawali v. The Deputy Commissioner of Police, Bombay and Another reported in AIR 1956 SCR 559 and Sachidananda Banerjee, A.C.C. Calcutta v. Sitaram Agarwala reported in 1999 (110) E.L.T. 292 (S.C.), he submitted that such decisions cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest on delayed refunds. It provides that if any duty under sub-section (2) of Section 11B to an application is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to the applicant interest under at such rate, not below 5% and not exceeding 30% p.a. as is for the time being fixed by the Central Government, by Notification in the official gazette 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, provided that where any duty ordered to be refunded under sub-section (2) of Section 11B in respect of an application under sub-section (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the appellant interest under the said section from the date immediately after three months from such date. Undisputedly, this is the only statutory provision in relation to payment of interest on delayed refund found in the said statute. There is no other provision on this subject. Being so, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y guidance in the Act or the Rules in that behalf, with respect to the period, rate and other matters, the matter cannot be left to the pleasure of the authorities. Accordingly, it must be held that the authorities under the Act have no power to award interest on any principle whatsoever. The question is whether this Court in a writ petition should award such interest, more so in the light of what we have called- the deliberate omission of Parliament to provide for such interest. 8. The Gujarat High court in G.H. Industries case had held thus :- 5. As for as the impugned order dated April 5, 1991 passed by the passed by the Assistant Collector of Central Excise produced at Annexure-B is concerned, it cannot be said that the order is in any way unlawful, unjust or arbitrary. Be it noted that the officers appointed under the Act and exercising powers under the Act are bound by the Act . They are creatures of the statute. They cannot go beyond the provisions of the statute. Learned Counsel for the petitioner has fairly conceded that the Act and the Rules framed thereunder did not make any provisions whatsoever for payment of interest in respect of alleged or proved unlawful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd applications (5 numbers) are dated 21-11-2006 9-1-2007. (ii) Section 11BB inserted in the Central Excise Act, 1944 with effect from 26-5-95 only has no retrospective application. This section is applicable when there is a delay in payment of refund claim beyond the period prescribed therein i.e. 3 months from the date of receipt of the refund application. (iii) The directions of Commissioner (Appeals) in para-10 of his order-in-appeal dated 31-3-2007 is for grant of interest under Section 11BB in respect of their original claim only. (iv) Section 11BB has no application in this case. It has not been held to be so in the appellate order either as there is no clear dictum to pay interest to the party from the date of their payment of duty dating back from 1989. (v) The facts and circumstances of the instant case are clearly distinguishable as well. In this case, the party availed modvat credit and chooses to pay duty of excise on their clearances owing to the fact that they were denied SSI status by concerned state Government authorities. They fought with the concerned authorities and won in the year 2005 only. (vi) During the period they paid duty b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no help to the appellants. 13. The decision of the Supreme Court in Sandvik Asia case was on the subject of claim for interest on interest which was withheld for very long period about twenty years, and that too without any justification. Besides, that was a case under the Income Tax Act, as also that bare reading of the decision would disclose that the same was granted essentially in exercise of powers under Article 142 of the Constitution of India. This is apparent from the decision of the Apex Court. 14. The decision of the Tribunal in Toyota Kirloskar Auto case was also in a case where the interest was sought to be claimed in relation to the amount which was collected without authority of law. Obviously, therefore, the decision cannot apply to the facts of the case in hand. 15. The decision in Sunder Steels case was of a single Member of the Tribunal solely on the basis that the authority below had ignored the Supreme Court decision in Sandvik Asia case while dealing with the issue pertaining to the interest. With utmost respect, the order does not lay down any proposition of law as such. Since the authority below had failed to note of the decision of the Apex Court which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 11BB are not attracted to Modvat credit whereas it was the case of the department that the said provisions are applicable even to Modvat credit. After considering the provisions of sub-section (2) of Section 11B in Paras 28 and 29 of the aforesaid judgment a Division Bench of the Gujarat High Court has held that the language of clause C to the provisions of sub-section (2) is very clear and it has been held that the claim for refund based on Modvat credit is maintainable in accordance with the procedure and limitation prescribed in sub-section (1) of Section 11B of the Central Excise Act. This judgement of the Division Bench of the Gujarat High Court has been upheld by the Supreme Court and the S.L.P. filed by the department being S.L.P. (Civil) No. 658/02 has been dismissed by the Supreme Court on 26-8-2002. From a complete reading of the aforesaid judgment it is clear that it is held in the aforesaid judgment that the provisions of Rule 57H and the notification issued thereunder enable refund under the Modvat credit scheme but even in such cases the procedure and limitation for claiming such refund would be governed by the provisions of Section 11B of the Central Excise Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of that provisional assessment, the excess found duty, if any is required to be refunded to the assessees by the department and even for that refund period of three months has been allowed to the revenue under Section 11BB of the Act. However, while introducing this provision w.e.f. 28-9-96, the legislature thought it fit not to provide for any interest on interest even in case of delay in payment of interest on refund amount. To read the liability to pay interest on interest in the provisions of law contained in Section 11BB of the Act, would virtually amount to legislate upon the Act and that is not the function of the Tribunal which is creation under the said Act itself and has to exercise power conferred upon it under the Act. It may also be added that before the introduction of Section 11BB, the Tribunal had no power to award interest by exercising inherent power, on the amount of refund of duty even if paid late. In this context, reference may be made to the judgement of the Hon ble Allahabad High Court in the case of Prestige Engineering (India) Pvt. Ltd. v. Union of India [1991 (51) E.L.T. 255 (All.)] wherein it was ruled as under :- When the Act (Central Excise) and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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