TMI Blog2019 (11) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... The first argument of the appellants that they are entitled for interest on interest being compensatory in nature is not sustainable. Since, it technically is interest on interest it cannot be called as compensation suo moto, nor has been so prayed by the appellant himself - Decided in favor of Revenue - decided in favor of Revenue. The alternate argument of the Appellant that from the amount of refund sanctioned since there is an interest liability, the amount should be first adjusted towards the interest liability - HELD THAT:- It is observed that this rule of first appropriating the interest is applicable only to the debts or to the decreetal amount. The case law as relied upon by the appellant is also either qua debts or qua the decreetal amount. Hence, the same is not applicable to the present case of refund of indirect taxes. The said rule of interpretation is otherwise contained in order-21 Rule-1 of Civil Procedure Code relating to execution of decrees for recovery of money. Such a provision stands absolutely excluded from the Central Excise Act, 1944 - the second line of argument of Appellant is also opined not applicable to the given set of facts circumstances. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not sanctioned. Aggrieved there from the Appellant filed an appeal before Commissioner (Appeals), Jodhpur who vide Order-in-Appeal No. 173(CRM)/ST/JDR/2017-18 dated 27.03.2018 and Order-in-Appeal No. 174(CRM)/ST/JDR/2017-18 dated 27.03.2018, since three months from the date of sanction of refund had expired, sanctioned interest from the date of receipt of the application for refund i.e. 29.06.2009 and 06.07.2009, and not 11.02.2015. 2.2 The Appellant, however, filed letter dated 18.04.2018 with the Department for interest @ 12.5% on the refund amount sanctioned to them. The Department issued three Show Cause Notices (SCN s) to the Appellant, pursuant to the letters submitted by them denying the interest amount to the extent of 12% rate and that the calculation of interest by the Appellant was alleged to be incorrect. The Appellant filed a detailed reply contesting the allegations and also the proposal for denial of the interest calculated by the Appellant before the Assistant Commissioner, Udaipur. In appeals 50120, 50121 50122 of 2019 claim for the interest of ₹ 33,54,833/-, ₹ 17,27,601/- ₹ 79,15,871/- respectively was filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Authority below has ignored the said decisions rather the order-under-challenge suffer from gross misinterpretation of these decisions. Learned Counsel has also placed reliance upon the decision of State of Gujarat Vs Unjha Pharmacy reported as 2016 (341) ELT 211 (Gujrat) wherein the decision of Gujrat Fluoro (Supra) has been followed holding that compensation for prolonged delay in sanction of interest has to be granted. 3.2 In alternative submission, it has been submitted that when principal amount is payable with interest, payment made by the department is to be first adjusted towards the interest and thereafter towards the principal amount. Thus, to the extent of short fall in refund of principal amount after first appropriating the sanctioned amount towards interest, the liability of Revenue to grant interest still stands. Learned Counsel has relied upon the decision in the case of V. Kala Bharathi and Ors. Vs. Oriental Ins. Co. Ltd. reported as AIR 2014 (S.C.) 1563, decision of Industrial Credit and Development Syndicate Vs. Smithaben H. Patel Ors. reported as AIR 1999 (SC) 1036 have been relied upon by the appellant. Finally, impressing upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed under Notification No. 41/2007 dated 06.10.2007 were got sanctioned by the original adjudication authority vide its order dated 07.05.2015. However, no interest was sanctioned from the date of filing of the refund application. The interest was finally sanctioned on delayed refund of service tax vide order dated 27.03.2018. 6. In furtherance whereof the demand of the sanctioned interest that too @ 12.5% on the refund amount was filed by the appellant. The interest was disbursed @ 6% vide order dated 06.07.2018. The appellant today has not contested the rate of interest. However, has claimed the interest on the said disbursed amount of interest on the ground that the same was disbursed after a reasonable delay. Hence, the only question is to be adjudicated is opined as: Whether the appellant is entitled to interest on the sanctioned amount of interest qua refund claims which could not be disbursed with three months thereof. 6.1 The relevant provision in this respect is Section 11BB of Central Excise Act, 1944, it reads as follows : Section 11BB. Interest of delayed refunds If any duty ordered to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the view that in Sandvik case (supra) this Court had directed the Revenue to pay interest on the statutory interest in case of delay in the payment. In other words, the interpretation placed is that the Revenue is obliged to pay an interest on interest in the event of its failure to refund the interest payable within the statutory period. 7. As we have already noticed, in Sandvik case (supra) this Court was considering the issue whether an assessee who is made to wait for refund of interest for decades be compensated for the great prejudice caused to it due to the delay in its payment after the lapse of statutory period. In the facts of that case, this Court had come to the conclusion that there was an inordinate delay on the part of the Revenue in refunding certain amount which included the statutory interest and therefore, directed the Revenue to pay compensation for the same not an interest on interest. 14. The aforesaid shows that in the latter decision of the Larger Bench, it was held that the decision in the case of Sandvik Asia Ltd. (supra) cannot be read to mean that Revenue is obliged to pay interest on interest in the event of its fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut with further caution that the interest on such interest cannot be ordered as per the above referred latter decision of the Apex Court in the case of Gujarat Fluoro Chemicals (supra). The Hon ble Apex Court in this case while relying upon the decision of Commissioner of Income Tax Vs. Narender Doshil 254 ITR 606 (S.P) has, however, held that the Revenue is liable to pay compensation on the amount of interest which it should have given to the assessee but has unjustifiably failed to do this. It becomes clear that inordinate delay for the grant of justified claim may entitle the person to get compensation against that delay the power of granting compensation is an inherent power. Present being a tribunal is not vested with any such inherent power. This Tribunal is a quasi judicial authority which is absolutely bound by the statutory provisions. No power as that of awarding compensation is available with the Tribunal as not being provided by the statute. Otherwise also it has never been the prayer of the appellant. Appellant is praying for entitlement of interest on the amount of delayed interest. Same cannot be called as the claim of compensation. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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