TMI Blog2021 (3) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... eposit till its realization @ 12% per annum. Appeal allowed - decided in favor of appellant. - Excise Appeal No. 50479 of 2019 (SM) - FINAL ORDER NO.51052/2021 - Dated:- 2-3-2021 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) Shri Bipin Garg, Advocate for the appellant Shri Pradeep Gupta, Authorised Representative for the respondent ORDER The appellant has filed the present appeal against the order-in-appeal dated 19.11.2018 passed by the Commissioner (Appeals), Central Excise Central Goods Service Tax, Jodhpur, denying interest on delayed refund i.e. from the date of deposit till the refund of the pre-deposit of principal amount. The details are as follows:- Table Amount (Rs.) SCN date O-I-O date Tribunal F.O. date H.C. 1,71,94,490/- On 31.03.06 (under protest) 29.03.06 reply filed contested. 30.11.06 Confirms 16.04.2007 confirms 25.01.2018 Allowed. Demand set aside. 2. Thereafter, the appellant preferred application for refund and also prayed fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme of Central Excise Act and its Rules has always been that wherever any demand of duty has not been paid by any assessee at the appropriate rate and date, the same attracts charging of interest on such amount from such date. Such principle needs to be followed even in such cases where any amount has been retained and utilised by the Revenue till the date of reimbursement of such amount to the assessee. In such cases, the assessee needs to be compensated by way of interest, towards the financial loss suffered by the assessee, due to action of the Revenue. To support his contention, he relied on the decision of the Hon ble Apex Court in the case of Sandvik Asia Limited -2006 (196) ELT 257 (SC). 7. He further submits that although the decision of the Hon ble Apex Court is in the context of Income Tax Act, but the provisions for granting the interest are identical to the provisions of Central Excise, and in terms of Article 141 of the Constitution of India, the judgement given by the Hon ble Supreme Court is the law of land and is binding on all lower Courts or Authorities. Therefore, in the light of the decision of the Hon ble Supreme Court in the case of Sandvik Asia Limited (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Sandvik Asia Ltd. (supra) will prevail being subsequent to the ruling of the Apex Court in the case of CCE, Hyderabad Vs. ITC Ltd. 2005 (179) ELT 15 (SC). He further places reliance on the ruling of this Bench in M/s. Hitesh Industries and Ors. Vs. Commissioner of CGST, being Final Order No.51631-51633 /2020 dated 07.12.2021, wherein under similar facts and circumstances, this Tribunal following the ruling of the Apex Court in the case of Sandvik Asia Ltd. (supra) as well as the Single Member Bench s ruling of this Tribunal in the case of Fujikawa Power another Vs. CCE ST, Chandigarh 2019 (11) ELT TMI 1197, has been pleased to hold that the interest is payable to the assessee. 12. Having considered the rival contentions, I find that admittedly, the amount under dispute was reversed on 31.03.2006 under protest and the same became pre-deposit within the meaning of Section 35 F ipso facto, by operation of law. Further, I find that in the preceding order of this Bench as held in the case of Hitesh Industries Ltd. (supra) relying on the ruling of the Apex Court in Sandvik Asia Ltd. (supra), that interest is payable to the assessee. The finding in the case of Hitesh Indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcisability does not arise. Therefore, the Issue No. 1 is answered in favour of the appellants. 14. Therefore, I find no force in the arguments advanced by the Ld.AR that the decision of Income Tax Act is not applicable to the Central Excise Act whereas the provisions of both Acts are pari materia. Therefore, the argument advanced by the Ld.AR is turned down and not acceptable. 15. I have gone through the case laws relied upon by the Ld.AR. In the case of ITC Ltd.(supra), the decision of Hon ble Apex Court has been delivered on 02.12.2004 whereas the decision in the case of Sandvik Asia Limited (supra) delivered on 27.1.2006. Therefore, the latest decision of the Hon ble Apex Court is having persuasive value. In all the other cases, (referred to by Ld. AR) have not considered the decision in the case of Sandvik Asia Limited (supra). 16. I have gone through the decision in the case of Sandvik Asia Limited (supra), wherein the section 243 dealt with situation of interest on delayed refund. 17. For better appreciation, section 243 of the Income Tax Act, 1961 reproduced as under:- 243. Interest on delayed refunds- (1) if the Income tax officer does not grant refund- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex has observed as under:- 45. The facts and the law referred to in paragraph (supra) would clearly go to show that the appellant was undisputably entitled to interest under Sections 214 and 244 of the Act as held by the various High Courts and also of this Court. In the instant case, the appellant s money had been unjustifiably withheld by the Department for 17 years without any rhyme or reason. The interest was paid only at the instance and the intervention of this Court in Civil Appeal No. 1887 of 1992 dated 30.04.1997. Interest on delayed payment of refund was not paid to the appellant on 27.03.1981 and 30.04.1986 due to the erroneous view that had been taken by the officials of the respondents. Interest on refund was granted to the appellant after a substantial lapse of time and hence it should be entitled to compensation for this period of delay. The High Court has failed to appreciate that while charging interest from the assesses, the Department first adjusts the amount paid towards interest so that the principle amount of tax payable remain outstanding and they are entitled to charge interest till the entire outstanding is paid. But when it comes to granting of inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges given to an employee or officer. 47. There cannot be any doubt that the award of interest on the refunded amount is as per the statute provisions of law as it then stood and on the peculiar facts and circumstances of each case. When a specific provision has been made under the statute, such provision has to govern the field. Therefore, the Court has to take all relevant factors into consideration while awarding the rate of interest on the compensation. 48. This is the fit and proper case in which action should be initiated against all the officers concerned who were all in charge of this case at the appropriate and relevant point of time and because of whose inaction the appellant was made to suffer both financially and mentally, even though the amount was liable to be refunded in the year 1986 and even prior to. A copy of this judgment will be forwarded to the Hon ble Minister for Finance for his perusal and further appropriate action against the erring officials on whose lethargic and adamant attitude the Department has to suffer financially. 49. By allowing this appeal, the Income-tax Department would have to pay a huge sum of money by way of compensation a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L.T. 188 (Cal.), wherein the peremptory directions of the Apex Court in the judgment of ITC Ltd. (supra) was considered and ordered 12% interest, and further held that when the High Court directed the respondents to pay interest to the appellant in terms of the circular dated 8-12-2004 on the pre-deposit of the delayed refund within two months, it has to be construed that, the Court meant the rate of interest which was awarded by the Supreme Court in the case of Commissioner of Central Excise v. ITC Ltd., which was the rate quantified by the Supreme Court in the absence of any statutory provisions in the Act in question. Even though various other judgments of various High Courts and the various Tribunals was brought to my notice awarding 15% interest, in view of the directions contained in the judgment of the Apex Court in Commissioner of Central Excise v. ITC Ltd. (supra) rate of interest is to be confined to 12%. I am also bound to follow the same. Therefore the interest that is liable to be paid by the respondents as per the directions of this Court in Ext. P12 judgment is fixed at 12% per annum. 15. Taking note of the compendious circumstances and reckoning the law, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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