TaxTMI 
TaxTMI 
2021 (3) TMI 123
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....d to grant refund of the principal amount. However, as regards the interest claim, the order is non-speaking. 3. Being aggrieved, the appellant preferred appeal before the Commissioner (Appeals), who was pleased to reject the appeal denying the claim of interest observing as follows:- "I find that in the present case in the Order-in-Appeal the issue of admissibility of credit on freight paid to GTA has attained finality only after the order of High Court dated 25.01.2018. The appellant in consequence to the said order has claimed refund vide letter dated 16.04.2018 and the same was sanctioned on 20.07.2018 i.e. within 3 months from the date of application". Thus, it was held that the refund has been granted within 3 months from the date of application and accordingly, the appellant is not entitled to interest on the same under Section 11 BB of the Act. Being aggrieved, the appellant is before this Tribunal. 4. Shri Bipin Garg, Ld. Counsel for the appellant urges that from the aforementioned facts, it is evident that the appellant had reversed the cenvat credit on 31.03.2006 under protest and had contested the show cause notice. The matter was finally settled in favour of the a....
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.... till its realisation. 8. He also relied on the decision of Hon'ble Allahabad High Court in the case of Hello Mineral Water (P) Limited vs. Union of India - 2004 (174) ELT 422 (All.) and Hindustan Coca-Cola Beverages Pvt. Ltd. vs. Union of India -2015 (324) ELT 299 (Guj.). He also relied on the decision of Hon'ble Madras High Court in the case of M/s Areva T&D India Limited vs. CC, Chennai -2013 (290) ELT 496 (Mad.). Therefore, he prayed that the interest for the intervening period be granted to the appellant. 9. Ld. Authorised Representative, Shri Pradeep Gupta for the respondent, opposes the prayer for grant of interest and submits that reliance placed on the ruling of Apex Court in the case of Sandvik Asia Limited (supra) is misplaced as in that case there was delay for a period ranging from twelve to seventeen years, whereas in the present cases, the refund have been granted within a period of three months from the date of application, pursuant to Final order of the High Court. Hence, no interest is payable. Further, in the case of Sandvik Asia Limited (supra), relates to refund of advance tax paid by the assessee, and refund arose pursuant to passing of the assessment order.....
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.... Central Excise Act, 1944, the interest on delayed refund is to be paid after 3 months from the date of communication of the order. When specific statute has been made, therefore, the decision in the case of Sandvik Asia Limited (supra) is not applicable to the facts of this case on the ground that the said decision has been delivered by the Hon'ble Apex Court in the context of Income Tax Act whereas we are dealing with Central Excise Act provisions. I find that whether the provisions of Income Tax Act and the provisions of Central Excise Act are pari materia or not. The same has been examined by this Tribunal in the case of Donar Foods reported in 2017 (346) ELT 612(Tri.-Chan.) wherein this Tribunal observed as under:- "27. We have seen both decisions referred before us. The decision in the case of M/s. Cynamid India Ltd. (SC) is with regard to the Income Tax Act and as per Section 2(29BA) of the Income-tax Act, 1961 the term "manufacture" with its grammatical variation means a change in non-living physical object or article - (a) resulting in transformation of object or article or things into a new and distinct object or article or having a distinct name, character and use;....
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....he end of the month in which the total income is determined under this Act, and (b) In any other case, within three months from the end of the month in which the claim for refund is made under this Chapter, the Central Government shall pay the assessee simple interest at (twelve) per cent per annum on the amount directed to be refunded from the date immediately following the expiry of the period of three months aforesaid to the date of the order granting the refund. Explanation: If the delay in granting the refund within the period of three months aforesaid is attributable to the assessee, whether wholly or in part, the period of the delay attributable to him shall be excluded from the period for which interest is payable." 18. 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 ref....
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....ay interest only upto the date of refund of tax while they take the benefit of assesses funds by delaying the payment of interest on refunds without incurring any further liability to pay interest. This stand taken by the respondents is discriminatory in nature and thereby causing great prejudice to the lakhs and lakhs of assesses. Very large number of assesses are adversely affected inasmuch as the Income Tax Department can now simply refuse to pay to the assesses amounts of interest lawfully and admittedly due to them as has happened in the instant case. It is a case of the appellant as set out 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 ....
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....tice would be amply met if we order payment of simple interest @ 9% p.a. from the date it became payable till the date it is actually paid. Even though the appellant is entitled to interest prior to 31.03.1986, learned counsel for the appellant fairly restricted his claim towards interest from 31.03.1986 to 27.03.1998 on which date a sum of Rs. 40,84,906/- was refunded. 50. The assessment years in question in the four appeals are the assessment years 1977-78, 1978-79, 1981-82 and 1982-83. Already the matter was pending for more than two decades. We, therefore, direct the respondents herein to pay the interest on Rs. 40,84,906 (rounded to Rs. 40,84,900) simple interest @ 9% p.a. 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." 20. 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 of 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. 21. Further, the interest on the ....
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.... of this judgment, after adjusting any interest paid." 22. Further, the same view was taken in the case Ghaziabad Ship Breakers Pvt.Ltd.-2010 (260) ELT 274 (Tri. Ahmd.), wherein this Tribunal observed as under:- "5. I have considered the submissions made by both the sides. I notice that appellants deposited amount in September, October and in November 2004, as per the directions of the department. In September 2004, the Hon'ble Gujarat High Court had dismissed the SCA filed by the appellants 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 i....