TMI Blog2020 (6) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... and accordingly set aside. Interest on deposit - relevant date - HELD THAT:- Till the time the show cause notice is adjudicated, the amount paid by the respondent cannot be said to have attained finality and refundable to them. The Tribunal directed the return of the said amount deposited by the respondent during investigation in all fairness attributable to inordinate delay of adjudication of the Show Cause Notice issued by the department. Needless to emphasize it is an interim measure caused to mitigate the hardship to the respondent for the delay in adjudication by the department. But, that does not mean that respondent can retain the said amount even if the issue of classification is decided against them - the ld. Commissioner (Appeals) order directing payment of interest from the date of deposit of the said amount is also devoid of merit and accordingly set aside. Appeal allowed - decided in favor of Revenue. - Excise Stay Application No. 60003 of 2020 Excise Appeal No. 61049 of 2019 - FINAL ORDER NO. 60385/2020 - Dated:- 2-3-2020 - Dr. D.M.MISRA, MEMBER (JUDICIAL) and MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Present for the Appellant: Shri Rajeev Gupta Vijay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17,99,72,033/-as applicable to Jarda Scented Tobacco and interest of ₹ 41,43,757/- for the period from July 2015 to January 2016 under protest. Later, show cause notice was issued on 01.07.2016 proposing various action against the respondent including appropriation of the duty, interest paid during the course of investigation. 4. The orders fixing the annual capacity of production under the relevant rules were passed by the Deputy Commissioner and the same were challenged before the Commissioner (Appeals), who disposed the appeal observing that on the same issue of classification of the declared commodity, show cause notice dated 01.7.2016 issued by the Dept. is pending adjudication, hence the appeals are premature and infructuous. The said order was accepted by the respondent, however, challenged by the Revenue disputing certain findings of the learned Commissioner (Appeals) being the subject matter of Appeal No. E/60106/17. The said appeal was disposed by the Tribunal with direction to the Commissioner, Central Excise to adjudicate the pending Show Cause Notice 01.7.2016 at the earliest. 5. The present dispute relates to refund claim of ₹15,61,27,927/- filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the abatement is also inadmissible. 7. The learned AR for the Revenue has further submitted that since the learned Commissioner (Appeals) held that the amount deposited during the course of investigation is not a duty but deposit, accordingly, interest is admissible under section 11BB of Central Excise Act, 1944 from the date of deposit of differential duty is unsustainable in law. He has further contended that reliance placed by the Ld Commissioner (Appeals) on the judgement of Tribunal in the case of Amidhara Texturising Private Limited Vs. CCE-2012 (278) ELT 257 is misplaced as the facts involved in the said case is different from the present one. In the present case, the Respondent deposited the differential duty pursuant to the capacity determination order of the adjudicating authority, since the commodity declared, on chemical test, found to be Jarda Scented Tobacco and not Chewing Tobacco without lime tubes . He has submitted that the said Orders of adjudicating authority still holds good as the Appeals against the said Orders by the party were rejected by the Commissioner (Appeals). He has submitted that till the time, the show cause notice dated 01.07.2016 is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of investigation, deposited the differential duty amount of ₹ 17,99,72,033/- and interest of ₹ 41,43,757/- for the period July, 2015 to January, 2016. A show-cause notice was issued to the Respondent on 01.07.2016 proposing to appropriate the differential duty interest amount paid and other actions against the respondent. Later, the respondent had filed refund claim of ₹ 15,61,27,927/- during the pendency of the adjudication of the said show-cause notice on the ground of inordinate delay in adjudication. The adjudicating authority rejected the said claim and on appeal, the ld. Commissioner (Appeals) upheld the said rejection Order. However, on further appeal to Tribunal, the refund claim was directed to be paid and consequently the adjudicating authority sanctioned the refund claim. 13. From the said refund claim, an amount of ₹ 29,91,483/- was denied to the respondent on the ground that no documentary evidence was placed before the adjudicating authority in support of the said claim and the respondent subsequently withdrew the said claim. The Revenue has challenged the finding of the Ld. Commissioner (Appeals) allowing the said amount to the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IVASTAVA) MEMBER (TECHNICAL) PER: SANJIV SRIVASTAVA While concurring with the order proposed by my learned brother Member (Judicial), I would like to add as follows: 2.0 Any refund made under a taxing statute are governed by the provisions of the said statute, and no refund can be made beyond the provisions of said statute as has been held by the nine member bench of the Apex Court, in case of Mafatlal Industries [1997 (89) ELT 247 (SC)]. In the said decision Hon ble Apex Court has clearly laid down that there can be no refund made in terms of Section 11B of the Central Excise Act, 1944 without a refund claim. The relevant excerpts from the decision are reproduced below: 96. It would be evident from the above discussions that the claims for refund under the said two enactments constitute an independent regime. Every decision favourable to an assessee/ manufacturer, whether on the question of classification, valuation or any other issue, does not automatically entail refund. Section 11B of the Central Excise Act, 1944 and Section 27 of The Customs Act, 1962, whether before or after 1991 amendment - as interpreted by us herein - make every refund claim subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransgress them. (xi) (xii) ..... 3.0 Section 11BB of the said act, ibid, provides for interest from the date, three months from the date of filing the refund claim. Same is provided in the case of refund of pre-deposit, made under Section 35F of the Act, as per Section 35 FF, ibid. 3.0 Admittedly the present case is not the case of refund of pre-deposit, but of certain amounts which were deposited by the respondents during the course of investigation/ inquiry. Hence such a refund even if arising as result of order of CESTAT, has to be strictly governed as per the provisions of Section 11B and Section 11BB. This is the law laid down by the Apex Court in case of Mafatlal Industries. 4.0 We find that in case of refund under Income Tax Act, 1961, Hon ble Apex Court has in case of Sandvik Asia Ltd [2006 (196) ELT 257 (SC)] has held as follows: In the present context, it is pertinent to refer to the Circular on Trade Notice issued by the Central Excise Department on the subject of refund of deposits made in terms of Section 35F of the Central Excise Act, 1944 and 129E of the Customs Act, 1962. The Circular is reproduced hereunder:- Refund/Return of deposits made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities will also be treated as simple letters asking for return of the deposits, and will be processed as such. Similarly, bank guarantees executed in lieu of cash deposits shall also be returned. 4. The above instructions may be brought to the notice of the field formations with a request to comply with the directions and settle all the claims without any further delay. Any deviation and resultant liability to interest on delayed refunds shall be viewed strictly. 5. All the trade associations may be requested to bring the contents of this circular to the knowledge of their members and the trade in general. 6. Kindly acknowledge receipt. [Source : M.F.(D.R.) F.No. 275/37/2K-CX.8A, dated 2-1-2002] A close scrutiny of the contents of the Circular dated 2.1.2002 would disclose as to the modalities for return of pre-deposits. It again reiterated that in terms of the Supreme Court order such pre-deposit must be returned within 3 months from the date of the order passed by the Tribunal, Court or other fiscal authority unless there is a stay on the order of the fiscal authority, tribunal, court by a superior court. The Department has very clearly stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 02.01.2002, as to the modalities for return of the pre-deposits are reiterated. It is again reiterated that in terms of Hon'ble Supreme Court's order such pre-deposit must be returned within 3 months from the date of the order passed by the Appellate Tribunal/Court or other Final Authority unless there is a stay on the order of the Final Authority/CESTAT/Court, by a superior Court. 5. Delay beyond this period of three months in such cases will be viewed adversely and appropriate disciplinary action will be initiated against the concerned defaulting officers. All concerned are requested to note that default will entail an interest liability, if such liability accrues by reason of any orders of the CESTAT/Court, such orders will have to be complied with and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.2004. 11. In fact, the petitioner is in search of payment of interest from March/May, 1998 which cannot be granted because there is no provision for the payment of interest nor the aforesaid amount was deposited under any coercion or compulsion. Moreover, the aforesaid amount was deposited by the petitioner voluntarily and, that too, prior to the issuance of the show cause notice dated 04.04.2001. 12. Thus, we see no reason to entertain this writ petition for grant of interest from March/May, 1998 upon an amount at ₹ 28,76,578/-. The principal amount has already been paid by the respondents to the petitioner on 13.05.2004. Thus, after three months period is over from the date of the order of the CESTAT (20.11.2003) till the actual payment of the amount (14.05.2004) i.e. for the period running from 21.11.2003 to 13.05.2004, the respondents are hereby directed to make the payment of interest upon the amount at ₹ 28,76,578/- @ 6% p.a. 8.0 Same view has been expressed by Mumbai Bench of CESTAT, in the case Juhu Resorts [Final Order No A/86832/2019 dated 03.10.2019], after taking the note of Section 11B and 11BB in following words: 5. A plain reading of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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