2022 (4) TMI 560 - AT - Central Excise

Tribunal grants 12% interest, directs swift payment.

The Tribunal allowed the appeal, modifying the lower authorities' order and granting the Appellant interest at 12% per annum from the date of deposit of ... Interest on delayed refund of excise duty - calculation of payment of interest - to be calculated for a period of 35 days i.e. period after expiry of three months from the date of communication of the order of the Tribunal dated 22.10.2020, till the date of refund i.e. 24.03.2021 or from the date of making deposit as was claimed by the Appellant throughout the adjudication as well the appellate proceedings? - rate of interest - HELD THAT:- It is found from the facts of the case that it is not in dispute that the Appellant had deposited the amounts as refunded during investigation proceedings which was later on set aside by this Tribunal in part leading to the captioned refund of duty. The Coordinate Bench of the Tribunal in the case of M/S. PARLE AGRO PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS & SERVICE TAX, NOIDA (VICE-VERSA) [2021 (5) TMI 870 - CESTAT ALLAHABAD] has held that interest shall be granted to the appellant @12% instead of @6% from the date of deposit till the date of payment. Thus, the Appellant is entitled to interest @ 12% from the date of deposit till the date of receipt of such refund - the lower authorities are directed to compute the eligible interest and pay the same within four weeks from the date of communication of this order - appeal allowed - decided in favor of appellant. Issues Involved:1. Interest on delayed refund of excise duty.2. Applicable rate of interest on the delayed refund.Detailed Analysis:Interest on Delayed Refund of Excise Duty:The primary issue revolves around the period from which interest on the delayed refund of excise duty should be calculated. The Appellant argued that interest should be calculated from the date of deposit of the amount, while the Adjudicating Authority and the First Appellate Authority allowed interest only for the period after the expiry of three months from the date of the Tribunal's order.The Tribunal referred to several precedents, including decisions in the cases of M/s J K Cement Works, M/s Glossy Colour and Paints, M/s Hitesh Industries, Riba Textiles Ltd, M/s Marshall Foundry & Engg. Pvt. Ltd., and M/s Parle Agro Pvt. Ltd., which supported the Appellant's contention that interest should be calculated from the date of deposit.Applicable Rate of Interest:The Appellant contended that the interest rate should be 12% per annum, as opposed to the 6% per annum granted by the lower authorities. The Tribunal examined various provisions of the Central Excise Act, 1944, including Sections 11AA, 11BB, and 11DD, which prescribe different interest rates for various scenarios involving delayed payments and refunds.The Tribunal found that there is no specific provision in the Central Excise Act dealing with the interest rate applicable to the refund of revenue deposits. However, it noted that interest rates under related provisions ranged from 6% to 18% per annum. The Tribunal cited the decision in Parle Agro Pvt. Ltd., which granted interest at 12% per annum for similar cases.Tribunal's Findings:1. Interest Calculation Period: The Tribunal concluded that the Appellant is entitled to interest from the date of deposit of the amount till the date of refund. This decision was supported by the precedent set in Parle Agro Pvt. Ltd. and other similar cases.2. Rate of Interest: The Tribunal determined that an interest rate of 12% per annum is appropriate, considering the range of interest rates provided under different sections of the Central Excise Act and supported by the decisions in Pace Marketing Specialities, Ebiz. Com Pvt. Ltd., and Riba Textiles Ltd..Conclusion:The Tribunal allowed the appeal, modifying the order of the First Appellate Authority. The Appellant was granted interest at the rate of 12% per annum from the date of deposit till the date of refund. The lower authorities were directed to compute and pay the eligible interest within four weeks from the date of communication of this order. The judgment emphasized that the decision in Gujarat Fluro Chemicals was not applicable as it pertained to interest on delayed payment of interest, which was not the issue in this case. The appeal was allowed with consequential relief.(Order pronounced in the open court on 11th April, 2022.)