2021 (5) TMI 868 - CESTAT NEW DELHI - Central Excise

Head Note / Extract:
Refund of Excise duty paid under protest - method of valuation of physician samples - refund application filed by the appellant was rejected by placing reliance upon the Circular dated 25.04.2005 that prescribed for payment of duty under rule 4 of the Valuation Rules - appellant followed the practice of valuation of physician samples on cost of production + 10% profit and also enclosed therewith a list of products cleared on assessable value (cost+10%) - Section 11A of the Excise Act - HELD THAT:- In the present case, the appellant only deposited an amount of ₹ 43,57,437 /- under protest but specifically stated that it was not accepting the contention of the department that it was required to pay differential duty from 25.04.2005 to 30.09.2006. It cannot, therefore, be urged that the appellant had deposited any amount under sub-section (1)(b) of section 11A of the Excise Act, in which case only notice was not required to be served on the appellant - it was obligatory on the part of Central Excise Officer to have issued a notice to the appellant for payment of the short paid amount of duty and, thereafter, adjudicate upon it. In the present case, however, the amount deposited by the appellant under protest has been appropriated towards differential excise duty without issuance of any notice contemplated under section 11A of the Excise Act. It has now to be seen whether an amount of ₹ 14,38,359 /- could have been appropriated as interest for alleged late payment of the amount of ₹ 43,57,427/-, which was deposited under protest (from rebates claimed and sanctioned to the appellant) - In the first instance, when the order rejecting the refund claim filed by the appellant has been set aside and the appellant is entitled to the refund amount, there is no reason as to why the appellant should be asked to pay any interest for the alleged delay in deposit of said the amount. Secondly, no notice was issued to the appellant for deposit of this interest amount. In the absence of any notice having been issued demanding this amount, for the reasons stated above, the amount could not have been appropriated. The appellant would be entitled to refund of ₹ 43,57,427 /- claimed in the application filed on 05.11.2008. The order for appropriation of ₹ 14,38,359/- towards interest, as confirmed by the Commissioner(Appeals) by order dated 16.08.2018, is also set aside - appeal allowed - decided in favor of appellant.