Section 11B not applicable; 12% interest allowed on refunded revenue deposit where no statutory interest rate governs

CESTAT held that section 11B was inapplicable because the respondent sought refund of a revenue deposit, not duty, and no statutory rate of interest governs such refunds. Noting that analogous Tribunal orders have awarded higher interest where deposits were returned, the bench determined 12% p.a. to be appropriate (within the range of rates notified under other provisions) and allowed the appeal, directing interest at 12% on the refunded deposit.

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Issues Involved:
1. Whether the interest on the refund amount should be granted at 12% instead of 6%.
2. Whether the order dated 28.05.2019 by the Commissioner (Appeals) should be set aside.

Issue-wise Detailed Analysis:

1. Interest Rate on Refund Amount:
The appellant, M/s. Parle Agro Pvt Ltd, filed Excise Appeal 70628 of 2019 seeking modification of the order dated 28.05.2019 by the Commissioner (Appeals), which granted interest at 6% on the refund amount. The appellant contended that the interest should be at 12% per annum. The Assistant Commissioner had initially sanctioned the refund claim with interest from the date the appellant became entitled to claim the refund (01.12.2005) up to the date of the Tribunal's order (31.01.2017). The Commissioner (Appeals) later granted interest from the date of deposit but maintained the rate at 6%.

The appellant argued that the provisions of Section 11B of the Central Excise Act, which deal with refund of duty, were not applicable as the amount in question was a revenue deposit, not central excise duty. This was supported by the Tribunal's order dated 31.01.2017, which had attained finality. The appellant cited several decisions, including Sandvik Asia Ltd. and Pace Marketing Specialities, where higher interest rates were granted on similar refunds.

The Tribunal, referencing various sections of the Central Excise Act (11AA, 11BB, 11DD, and 11AB), noted that interest rates in these provisions ranged from 6% to 18%. Considering this, and the precedent set by previous judgments, the Tribunal found that granting interest at 12% per annum was appropriate. Therefore, the Tribunal allowed the appeal, modifying the order to grant interest at 12% from the date of deposit till the date of payment.

2. Setting Aside the Order Dated 28.05.2019:
The Principal Commissioner filed Excise Appeal 70674 of 2019 to set aside the order dated 28.05.2019 by the Commissioner (Appeals). The Department argued that the amount in question was central excise duty, not a revenue deposit. The appellant filed cross-objections, asserting that the appeal was not maintainable as the finding that the amount was a revenue deposit had already attained finality in the Tribunal's order dated 31.01.2017, which the Department did not challenge.

The Tribunal accepted the appellant's submission, noting that the Department had accepted the order dated 31.01.2017, as evidenced by a letter from the CGST Commissioner of Noida. Furthermore, the Assistant Commissioner had ordered the refund of the amount, and this order was not contested by the Department. Consequently, the Tribunal dismissed the Department's appeal and allowed the cross-objections filed by the appellant.

Conclusion:
The Tribunal allowed Excise Appeal No. 70628 of 2019, modifying the order to grant interest at 12% per annum from the date of deposit till the date of payment. Excise Appeal No. 70674 of 2019 filed by the Principal Commissioner was dismissed, and the cross-objections by the appellant were allowed.

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