2018 (12) TMI 922 - AT - Central Excise

Tribunal Orders Refund of Central Excise Duty, Emphasizes Timely Processing

Caparo Engineering India Ltd Versus CGST, C.C. & C.E., Ujjain

The Tribunal allowed the appeal regarding the refund of a pre-deposit amount of Central Excise duty. The appellant's refund application was delayed beyond ... Interest on delayed refund - relevant date - whether the date of refund application as required in Section 11B of the Customs Act has to be the date of application on which it has been filed or it has to be the date on which the deficiencies in the application got corrected? Held that:- When even read with Section 11BB of Central Excise Act that for the payment of interest after three months from the date of receipt of refund application, the applicant shall be entitled for the interest at the rate as prescribed. The provision is nowhere expressing about “application” to be called so only in case it is supported by the requisite documents - The law has been settled that the fiscal legislation has to be construed strictly and one has to look merely at what is said in the relevant provision. It is also apparent from record that the deficiency, whatever, noticed in the application was informed to the applicant after 15 days. It is Department’s acknowledged case that the application was filed on 15.03.2017 and the copy of the Final Order was asked from the applicant vide the Department’s letter dated 30.03.2017 - the statute is not making any distinction in the date of receipt of application from that of the receipt of the application complete in all respect. The explanation as relied upon by Commissioner (Appeals) of some Custom Refund Regulations cannot supersede the statute and the mandate thereof in the Section 11B and 11BB of the Central Excise Act, 1944. Appeal allowed - decided in favor of appellant. Issues:1. Refund of pre-deposit amount with interest beyond three months.Analysis:1. The judgment dealt with an appeal regarding the refund of a pre-deposit amount of Central Excise duty. The appellant initially paid the duty, which was later allowed in favor of the appellant by the Tribunal. The appellant then sought a refund of the pre-deposit amount of Rs. 40 lakhs, which was sanctioned after a delay of over three months, without the interest component. The appellant challenged this before the Tribunal.2. The appellant argued that as per Circular No. 802/35/2004 and Section 11B of the Customs Act, the Department is liable to pay interest if the refund is not sanctioned within three months. The appellant contended that despite providing the required documents, the interest was denied unreasonably. The appellant cited the decision of the Hon'ble Apex Court in Union of India Vs. Hamdard Laboratories to support their claim for interest. The appellant requested the Tribunal to consider the application date as 15.03.2018 and allow the appeal.3. The Department countered by stating that the refund application was incomplete initially due to missing documents, including the copy of the Final Order of the Tribunal. The Department argued that the appellant only provided the necessary documents on 04.01.2018, and the refund was sanctioned on 03.04.2018, within the three-month limit. The Department relied on the explanation in the custom refund application regulations to support their stance. The Department urged the Tribunal to dismiss the appeal.4. The Tribunal analyzed the relevant provisions, including Section 11BB of the Central Excise Act, which mandates interest on delayed refunds. The Tribunal emphasized that the law must be construed strictly, without room for implication or intentment. Referring to a Notification highlighted by the appellant, the Tribunal noted that pre-deposits must be refunded within three months from the date of the Tribunal's order. The Tribunal found that the Department's plea for an extension due to deficiencies in the application was not valid under the statutory provisions.5. The Tribunal observed that the deficiencies in the application were communicated to the appellant after 15 days, contrary to the requirement of informing deficiencies within two days as per legal precedents. The Tribunal held that the explanation in the Custom Refund Regulations could not override the statutory provisions of Section 11B and 11BB of the Central Excise Act. Consequently, the Tribunal set aside the order and allowed the appeal, directing the Department to provide consequential benefits to the appellant.