TMI Blog2020 (1) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... late Authority i.e. Commissioner (A). The Department instead of refunding the pre-deposit made by the appellant issued a SCN proposing to deny the refund under Section 11B of the Central Excise Act, 1944 on the point of limitation and consequently rejected the refund under Section 11B being barred by limitation. The impugned order rejecting the refund claim under Section 11B on limitation is not sustainable in law and the same is set aside by allowing the appeal of the appellant - the appellants are entitled to interest on the delayed refund immediately after the expiry of three months from the date of passing of the Order-in-Appeal - Appeal allowed - decided in favor of appellant. - Central Excise Appeal No. 20505 of 2019 - Final Order No.20070/2020 - Dated:- 27-1-2020 - SHRI S.S GARG, JUDICIAL MEMBER For the Appellant : Mr. Raghvendra B. Hanjer, Advocate For the Respondent : Mr. S.Devarajan, Joint Commissioner (AR) ORDER The present appeal is directed against the impugned order dated 11.03.2019 passed by the Commissioner (Appeals) whereby the Commissioner (A) has rejected the appeal of the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,291, and ₹ 91,453/- by way of reversal of CENVAT credit towards confirmed demand along with interest of ₹ 1,54,001/-, ₹ 42,291/- and ₹ 11,367/- vide Challans dated 18.02.2011 and also paid 25% penalty in terms of Section 11AC(1)(b) and intimated to the Department. The Commissioner (A), Bangalore vide its OIA Nos. 584 585/2013 dated 22.10.2013 allowed both the appeals filed by the appellant. Consequent to the order allowing the appeal of the appellant by the Commissioner, the amount was not refunded and thereafter, the appellant vide formal letter dated 13.07.2017 requested the Assistant Commissioner for refund of ₹ 8,71,228/- paid at the time of filing the appeal before the Commissioner (A). Thereafter, a SCN dated 12.10.2017 was issued to the appellant proposing to reject the refund claim as time barred in terms of Section 11B of the Central Excise Act, 1944. After following the due process, the Assistant Commissioner vide OIO dated 26.04.2018 rejected the refund claim on the ground of limitation in terms of Section 11B of the Central Excise Act. Aggrieved by the said order, the appellant filed appeal before the Commissioner (A) who rejected the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri. Ahmd.) Chemtrols Engineering Ltd. Vs CCE, Mumbai-II, 2007 (212) ELT 557 (Tri. Mumbai) Nelco Ltd. Vs UOI, 2002 (144) ELT 56 (Bom.) Lorenso Bestenso Vs CC (Imports), Nhava Sheva, 2015 (315) ELT 478 (Tri. Mumbai) CCE, Madurai Vs Servalakshmi Paper and Boards Pvt. Ltd., 2011 (263) ELT 476 (Tri. Chennai) CCE Vs Klasspak Pvt. Ltd., 2005 (179) ELT 365 (Tri. Mum.) 4.1. He also submitted that filing of appeal against the Order of the Deputy Commissioner itself proves that the payment made during the pendency of the proceedings should be treated as deposit and also paid under protest and consequently, the period of limitation of one year is not applicable. The appellant has also prayed that refund should be granted along with interest. 5. On the other hand, learned AR defended the impugned order and submitted that the appellant paid the duty in terms of the OIO passed by the Original Authority. He further submitted that once the appellant has paid the duty and is claiming the refund then the refund application is subject to the limitation as prescribed in Section 11B of the Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 35F of the Central Excise Act, 1944 and Section 129E of the Customs Act, 1962 Reg. The issue relating to refund of pre-deposit made during the pendency of appeal was discussed in the Board Meeting. It was decided that since the practice in the Department had all along been to consider such deposits as other than duty, such deposits should be returned in the event of the appellant succeeds in appeal or the matter is remanded for fresh adjudication. 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 Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instances arising out of non-implementation of the judicial orders, the Board has reason to review and reiterate the earlier Circulars on the subject of non- implementation of orders of CESTAT or any Final Authority in relation to returning pre-deposits made as per directions of CESTAT or any other Final Authority in terms of Section 35F of the Central Excise Act, 1944 Section 129E of the Customs Act, 1962. The Board has taken a strict view with regard to non-returning of such deposits. 2. As we are all aware the CESTAT has in a number of such cases awarded interest on pre-deposits where its orders have not been implemented and the Department had challenged this and filed Civil Appeals in the Supreme Court. 3. The Board has noted the observations of the Hon ble Supreme Court in its order dated 21-9-2004 and has decided that pre-deposits shall be returned within a period of three months of the disposal of the appeals in the assessee s favour. 4. Accordingly, the contents of the Circular No. 275/37/2000-CX. 8A dated 2-1-2002 [2002 (139) E.L.T. T38], as to the modalities for return of the pre-deposits are reiterated. It is again reitera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also made a mention of Nestle India Ltd. reported 2003 (154) ELT 567 wherein the Hon ble Karnataka High Court following the same thread of reasoning, held that pre-deposit amount was not towards tax but rather to avail the remedy of an appeal. 7. Further, I find that in view of the various Circulars cited supra and the judgment of the Hon ble Bombay High Court which has been upheld by the Hon ble Supreme Court and has also followed by the Hon ble Delhi High Court in the case of MRF Ltd. cited supra, I am of the considered view that the impugned order rejecting the refund claim under Section 11B on limitation is not sustainable in law and the same is set aside by allowing the appeal of the appellant. Further, I hold that I hold that in view of the judgment of the Hon ble Bombay High Court in the case of Nelco Ltd. cited supra which has been upheld by the Hon ble Supreme Court, the appellants are entitled to interest on the delayed refund immediately after the expiry of three months from the date of passing of the Order-in-Appeal No. 584 585/2013 dated 22.10.2013 till the date of actual payment to the appellant. Consequently, the appeal is allowed on the above terms. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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