TMI Blog2016 (9) TMI 1405X X X X Extracts X X X X X X X X Extracts X X X X ..... ust enrichment has been held inapplicable in such cases. Circular No. 802/35/2004-CX : MANU/EXCR/0037/2004 dated 8.12.2004 provides that against an order whereunder refund is admissible to an assessee with regard to the pre-deposit, if an appeal is pending, that shall not be taken as justification for denying refund. Interest on delayed deposit or refund - Held that: - a Division Bench of Delhi High Court in Surinder Singh v. Union of India, [2006 (11) TMI 12 - HIGH COURT, DELHI], relying on Supreme Court judgment in Prince Khadi Woollen Handloom Producers Cooperative Society v. CCE, [1996 (11) TMI 72 - SUPREME COURT OF INDIA], said that State, if has wrongly collected a tax from a person, and, even if there is no specific provision, still is liable to refund tax alongwith interest. The consensus of the authorities of various High Courts as well as Supreme Court is that any amount received by Revenue, as deposit or pre-deposit i.e. unauthorizedly or under mistaken notion etc., cannot be retained by Revenue since it has no authority in law to retain such amount and it must be refunded with interest. Petition allowed - decided in favor of petitioner. - Civil Misc. Writ ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and order dated 23.12.2012. Tribunal remitted matter back to Commissioner (Appeals) to rehear and decide. 7. Commissioner (Appeals), thereafter, vide order dated 29.8.2012, allowed appeal and set aside order dated 31.12.2007 whereby 'Service Tax' alongwith interest and penalty were imposed by ACCE. Order dated 29.8.2012 passed by Commissioner (Appeals) was communicated to Superintendent (Range-I) vide letters dated 2.4.2013, 6.6.2013 and 3.1.2014, requiring to refund entire amount deposited by petitioner under coercion exercised by respondents' authorities. 8. Despite personal visits, when petitioner did not receive any refund, he filed a refund claim on 27.1.2014 for ₹ 34,51,500/- in the office of Commissioner Central Excise, Customs and Service Tax, Noida (hereinafter referred to as 'Commissioner (CECST)'. Superintendent (Refund) Noida, wrote a letter dated 25.2.2014, requiring petitioner to submit some documents and also to file refund application in Form-R. No such form existed having been repealed long back. Other documents demanded were submitted by petitioner vide letter dated 25.2.2014. Petitioner sent reminder dated 25.3.2014 and reply dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Further, notice required to show-cause why interest of ₹ 2,59,000/- as per Rule-6 of Service Tax Rules, 1994 read with Section 75 of Finance Act, 1994 may not be recovered from petitioner. Since it was already paid voluntarily, why the same should not be appropriated. 14. The facts stated by Revenue in notice dated 3.7.2007 that petitioner's deposit already made, why be not appropriated, shows that on that dated, Revenue was clear in its understanding that money lying with them does not belong to them, but they are, at the best, custodian and in fact money belong to petitioner. Till it is not appropriated, it was in the nature of deposit or predeposit. The Adjudicating Authority thereafter passed order confirming aforesaid demand and appropriating amount already deposited by petitioner towards 'Service Tax' and interest on 'Service Tax'. It is thus evident that petitioner had not deposited any 'Service Tax' or interest but deposit of ₹ 25,55,000/- and ₹ 2,59,000/- was in the nature of pre-deposit which, subsequently, after confirming demand, was appropriated by Adjudicating Authority. 15. Commissioner (Appeals) found that unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the whole or any part of the duty of excise paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund: Provided that the amount of duty of excise as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to-- (a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) unspent advance deposits lying in balance in the applicant's current account maintained with the Commissioner of Central Excise; (b) unspent advance deposits lying in balance in the applicant's current account maintained with the Commissioner of Central Excise; (c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act; (d) the duty of excise paid by the manufacturer, if he had not passed on the incidence of such duty to any other pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral law, petitioner can be held entitled to such relief. 19. If an amount is paid by an assessee, in duly of excise, pursuant to a liability created under a Statute or by statutory order, passed by competent authority, and such demand is later found illegal, Section 11 AB contemplates that amount received shall be refunded to assessee provided that the incidence of such duty had not been passed on by him to any other person. 20. In the present case, the amount in question, refund whereof is claimed, was not paid. It is not such amount of duty which was deposited by assessee. To check evasion of 'Excise duty' or 'Service Tax', raid was conducted on 12.1.2007, when during raid, sum of ₹ 25,55,000/- was got deposited. Amount of interest thereon was subsequently realized from petitioner on 29.3.2007 i.e. before issue of notice on 3.7.2007. Such deposit was involuntary by petitioner since no one shall deposit a huge money without creation of liability in law. Such an amount has been held to be a pre-deposit and principles of unjust enrichment has been held inapplicable in such cases. 21. In Commissioner of Central Excise, Coimbatore v. Pricol Ltd., 2015 (3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union of India v. Suvidhe Ltd., 1997 (94) ELT A159(SC). 25. We are also informed that following the judgment in Suvidhe Ltd. (supra), Central Board of Excise and Customs (hereinafter referred to as 'CBEC) issued Circular No. 275/37/2K-CX.8A dated 2.1.2002 providing as under: 2. It would be pertinent to mention that the Revenue had recently filed a Special Leave Petition against Mumbai High Court's order in the matter of NELCO LTD, challenging the grant of interest on delayed refund of pre-deposit as to whether: (i) the High Court is right in granting interest to the depositor since the law contained in Section 35F of the Act does in no way provide for any type of compensation in the event of an appellant finally succeeding in the appeal, and, (ii) the refunds so claimed are covered under the provisions of Section 11B of the Act and are governed by the parameters applicable to the claim of refund of duty as the amount is deposited under Section 35F of the Central Excise Act, 1944. The Hon'ble Supreme Court vide its order dated 26.11.2001 dismissed the appeal. Even though the Apex Court did not spell out the reasons for dismissal, it can well be constru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd of Excise and Customs by the Solicitor General of India that Board proposes to issue a circular in connection with the payment on all such pre-deposits. A draft copy of the circular was also handed over to the Supreme Court. In view thereof, Supreme Court decided the appeal holding as under: Having regard to the contents of the draft circular we direct compliance with the final order impugned before us and payment of interest in terms of the draft circular. The draft circular shall be appended to and the contents form part of this order. The appeal is disposed of. In view of this order any judgment of any High Court holding to the contrary will no longer be good law. 29. Supreme Court in the aforesaid order allowed interest at the rate of 12% per annum. 30. Then we come on the question of interest on refund. In this regard, we find that a Division Bench of Delhi High Court in Surinder Singh v. Union of India, 2006 (204) ELT 534 (Del), relying on Supreme Court judgment in Prince Khadi Woollen Handloom Producers Cooperative Society v. CCE, 1996 (88) ELT 637 (SC), said that State, if has wrongly collected a tax from a person, and, even if there is no specific provision, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stayed nor suspended and therefore, continues to hold the field. Moreover, the said decision is doubted with respect to the issue whether interest is payable by the Revenue to the assessee if the aggregate of installments of Advance tax/TDS paid exceeds the assessed tax. Therefore, a doubt is cast only in respect of the finding which is in context with Section 214 and Section 244 of the Income-tax Act, 1961 and not with regard to grant of interest as compensation to the party who has been wrongfully deprived of the use of its money by an illegal retention of the same by the authority. Therefore, the said decision will continue to hold good in respect of refund cases, on equitable considerations, where any amount is wrongfully withheld from an assessee without authority of law. 33. We may also refer hereon a Division Bench judgment of Karnataka High Court in Commissioner of Central Excise v. KVR Construction, 2012 (50) VST 469, wherein construing Section 11B, Court said that it refer to claim for refund of duty of excise only and does not refers to any other amount collected without authority of law. That was a case of 'Service Tax' and Court said as under: Though u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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