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2015 (2) TMI 302 - AT - Central ExciseInterest claim on refund - Commissioner granted interest on refund claim from belated date - Held that:- Appellant on 26.11.1997 had paid an amount of ₹ 10.00 Lakhs under protest during investigation of the matter against them, as the Departmental officer was of the view that the appellant s activity of filling hydrogen gas from pipeline into retail cylinder amounts to manufacture, subsequently, the additional Commissioner vide order dated 31.10.2002 confirmed the duty demand of ₹ 17.59 Lakhs against appellant holding that their activity amounts to manufacture and specifically appropriated the amount of ₹ 10.00 Lakhs already paid by them. Thus, once the Addl. Commissioner held that the appellant activity amounts to manufacture and confirmed the duty demand of ₹ 17.59 Lkhs against them and appropriated ₹ 10.00 Lakhs as payment towards their assessed duty liability, the ₹ 10.00 Lakhs earlier paid by them becomes the payment of duty by the appellant towards assessed duty liability and ceased to be an amount paid on ad-hoc basis. The refund claim of the amount of ₹ 10.00 Lakhs arose, when the Addl. Commissioner s order was set aside by the Commissioner (Appeals) vide order in appeal dated 20th November, 2003, who held that the appellant s activity does not amount to manufacture and set aside the Addl. Commissioner s order dated 31.10.2002. The refund application was filed only on 06.07.2004. In terms of Section 11BB of the Central Excise Act, the interest liability of the Department for delay in payment of refund under Section 11B arises, only when there is delay beyond 3 months from the date of filing of the refund application. Since in this case refund application had been made on 06.07.2004, the interest liability would start from 07.10.2004 till the refund was paid to the appellant. The Commissioner (Appeals), however, has granted interest even from much earlier period from 20th February, 2004, against which it is the department which should be aggrieved and not the appellant. - No merit in appeal - Decided against assessee.
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