Tribunal orders refund of excess interest and penalty under section 11AC

The tribunal allowed the appeal, directing the respondent to refund the excess amounts deposited as interest and penalty under section 11AC by the appellant during the investigation.

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Issues involved:
The appeal challenges the order-in-appeal dated 15.09.2021 passed by the Commissioner of Central Tax, upholding the order-in-original passed by the Assistant Commissioner, concerning central excise duty, Cenvat credit, and refund of excess amounts paid as interest and penalty.

Central excise duty and Cenvat credit:
The appellant contested for Cenvat credit on inputs used in manufacturing the final product, which was not examined by lower authorities. The tribunal remanded the matter for verification of duty payment on inputs, allowing Cenvat credit if paid, and directing examination of necessary documents and provision of hearing to the appellant. The Joint Commissioner later allowed Cenvat credit after verification, recalculating the duty liability and refunding the excess duty deposited during investigation.

Refund of excess interest and penalty:
The Assistant Commissioner refunded the excess duty but not the excess interest paid by the appellant during the first round of litigation. The appellant argued that due to redetermination of duty, it was liable to pay less interest than deposited. The Assistant Commissioner declined the refund of excess interest, citing the CESTAT's final order directing redetermination of duty but not interest. The tribunal held that interest and penalty should be recalculated based on the redetermined duty, directing the respondent to refund the excess amounts deposited by the appellant.

Decision:
The tribunal allowed the appeal, directing the respondent to refund the excess amounts deposited as interest and penalty under section 11AC by the appellant during the investigation.

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