TMI Blog2024 (2) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... er-in-Appeal No. 47/2023-24 dated 23.05.2023. The facts in brief relevant for the purpose are that the appellants are engaged in the business of setting up and managing shipping centres, family entertainment centres, multiplexes, popularly known as Malls etc. Department initially observed that the appellants have wrongly availed the Cenvat Credit of service tax paid amounting to Rs.10,21,04,601/-. The said observations and demand of reversal of said amount was confirmed vide Order-in-Original No. 01/COMMR/IND/ST/22 dated 03.01.2022. Appeal against the said order was allowed by this Tribunal vide Final Order No. 51784/2021 dated 01.09.2021 allowing the appellant eligible for Cenvat Credit availed for the period prior to 01.04.2011 directing the department to quantify the same. 2. Subsequent to the said Final order and order quantifying the demand, the appellant filed the refund claim for an amount of Rs.7,15,09,643/- on 04.01.2022. The said refund was sanctioned vide Order-in-Original No. 339/AC/ST/REFUND/Div.V/Indore/2020-21 dated 02.02.2022, however, without any interest on the said amount. Resultantly, the order under challenge was assailed before Commissioner (Appeals). How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative prays for appeal to be dismissed. 4. After hearing the rival contentions and perusing the record of the present appeal, following are the observed as the admitted facts: (1) the refund claim in question has been filed pursuant to the final order of this Tribunal dated 01.09.2021. (2) the refund claim of amount mentioned in the refund claim is the amount which was deposited by the appellant during investigation under protest. (3) The refund claim is not hit by time bar. (4) The instant case being in respect of reversal of Cenvat credit under protest does not have barring clause of unjust enrichment. These admitted facts are sufficient for us to hold that findings of the Hon ble Apex court in the case of Mafatlal (supra) are not applicable to the given set of circumstances. 5. We observe that the Adjudicating Authority while denying the entitlement for interest invoked section 11B/11BB of Central Excise Act. From the bare reading of the above section, it is clear that the provision refers to the claim of refund of duty of excise only, it does not refer to any other amount collected without authority of law. In the case on hand, admittedly, the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of the delay attributable to him shall be excluded from the period for which interest is payable. 16. Section 35FF of the Central Excise Act, 1944 deals with the situation in hand, the same is extracted below:- Section 35FF. Interest on delayed refund of amount deposited under the proviso to Section 35F- Where an amount deposited by the appellant in pursuance of an order passed by the Commissioner (Appeals) or the Appellate Tribunal (hereinafter referred to as the appellate authority) under the first proviso to section 35F, is required to be refunded consequent upon the order of the appellate authority and such amount is not refunded within three months from the date of communication of such order to the adjudicating authority, unless the operation of the order of the appellate authority is stayed by a superior court or tribunal, there shall be paid to the appellant interest at the rate specified in section 11BB after the expiry of three months from the date of communication of the order of the appellate authority, till the date of refund of such amount. 17. On-going through the provisions of both Income Tax Act, 1961 and Central Excise Act, 1944, the interest on del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above in the instant case for the assessment year 1978-79, it has been deprived of an amount of Rs.40 lakhs for no fault of its own and exclusively because of the admittedly unlawful actions of the Income Tax Department for periods ranging up to 17 years without any compensation whatsoever from the Department. Such actions and consequences, in our opinion, seriously affected the administration of justice and the rule of law. COMPENSATION: 46. The word Compensation has been defined in P. Ramanatha Aiyar s Advanced Law Lexicon 3rd Edition 2005 page 918 as follows: An act which a Court orders to be done, or money which a Court orders to be paid, by a person whose acts or omissions have caused loss or injury to another in order that thereby the person damnified may receive equal value for his loss, or be made whole in respect of his injury; the consideration or price of a privilege purchased; some thing given or obtained as an equivalent; the rendering of an equivalent in value or amount; an equivalent given for property taken or for an injury done to another; the giving back an equivalent in either money which is but the measure of value, or in actual value otherwise co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, direct the respondents herein to pay the interest on Rs.40,84,906 (rounded of to Rs.40,84,900) simple interest @ 9% p.a. 7 Excise Appeal No. 60446 of 2018 from 31.03.1986 to 27.03.1998 within one month from today failing which the Department shall pay the penal interest @ 15% p.a. for the above said period. 18. As the Hon ble Apex Court has answered the issue holding that the assessee is entitled to claim interest from the date of payment of initial amount till the date its refund. Therefore, I hold that the appellants are entitled to claim the interest on delayed refund from the date of deposit till its realization. 19. Further, the interest on the refund shall be payable @ 12% per annum as held by Hon ble Kerala High Court in the case of Sony Pictures Networks India Pvt.Ltd.-2017 (353) ELT 179 (Ker.) wherein it has held as under:- 14. Now, the sole question remains to be considered is what is the nature of interest that the petitioner is entitled to get. As discussed above in the judgment Commissioner of Central Excise v. ITC (supra), the Apex Court confined the interest to 12% and further held that any judgment/decision of any High Court taking contrary view, will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the order of the Tribunal rejecting the appeal for failure to make the pre-deposit. This SCA was dismissed in September 2004 and SLP was filed in the Hon ble Supreme Court in October 2004. In July 2005, the Hon ble Supreme Court ordered that if the amount directed to be deposited by the Tribunal is deposited, the appeals before the Tribunal has to be restored and decided on merits. In these circumstances, the amount deposited by the appellant is to be treated as pre-deposit since the matter had not attained finality during the relevant period. Therefore, refund is to be treated as refund of pre-deposit made when the appeal was pending. There is no dispute that the amounts deposited is duty but this is not the issue which has been taken into account while precedent decisions have allowed the interest at 12% on the refunds claimed in respect of pre deposit. I find that in the decisions cited by the learned advocate, interest at 12% has been allowed. Therefore, following the judicial discipline, I consider it appropriate that interest in this case also is to be allowed @ 12%. Accordingly, original adjudicating authority is directed to workout the differential interest amount a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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