TaxTMI 
TaxTMI 
2022 (4) TMI 728
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....on'ble High court of Gujarat directed the appellant to clear the goods on provisional assessment under Rule 9 B of the Central Excise Rules on payment of 50% of duty and furnish bank guarantee for the differential amount of duty. The Commissioner (Appeals) vide order dated 06.01.1998 decided the appellant's appeal and held that the goods are rightly classifiable under heading 2302 and therefore, the appellant stopped paying duty. On 29.07.1998 the appellant filed a refund claim of Rs. 1, 76, 04,008/- forthe duty paid under protest during 19.10.1996 to 21.01.1998. After some litigation on 05.03.2008 the Deputy Commissioner, Vapi ultimately allowed the refund of Rs. 83,41,421/- by way of cash refund and an amount of Rs. 73,64,370/- by way of credit in the Cenvat register a total of Rs. 1,57,05,791/-. On 01.05.2008 the appellant filed a claim for interest on delayed refund, as the refund claim was filed on 15.07.1998 whereas the same came to be sanctioned on 05.03.2008. On 19.06.2008 a SCN was issued to the appellant proposing rejection of claim of interest on the ground that the amount was refunded pursuant to finalization of provisional assessment in terms of Rule 9 B of the rules a....
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....ction 11 BB the appellant is entitled to interest for the delay in sanction of refund claim from the date of filing of refund claim. In support of their claim, the appellant has relied on the decision of Hon'ble Apex Court in the case of Ranbaxy Laboratories Ltd (Supra). In para 9 of the said order following has been observed: "9. It is manifest from the afore-extracted provisions that Section 11BB of the Act comes into play only after an order for refund has been made under Section 11B of the Act. Section 11BB of the Act lays down that in case any duty paid is found refundable and if the duty is not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11B of the Act, then the applicant shall be paid interest at such rate, as may be fixed by the Central Government, on expiry of a period of three months from the date of receipt of the application. The Explanation appearing below Proviso to Section 11BB introduces a deeming fiction that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise but by an Appellate Autho....
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....reading of the provisions of Section 11BB of the Central Excise Act, it is evident that the same provides for payment of interest from the date immediately after the expiry of three months from the date of receipt of the refund application till the date of refund of such duty. In the facts of the present case, it is an admitted position that the refund claim was made on 24-1-2005 and the amount was refunded on 12-11-2010. The interest on refund of Rs. 28,94,776/-, however, in terms of the order of the Commissioner (Appeals) and the Tribunal, was paid for the period from 24-4-2005 to 2-6-2008 and the interest from 3-6-2008 till the date of actual payment i.e. 10-3-2010 was not paid on the ground that such amount had been transferred to the Consumer Welfare Fund pursuant to the order passed by the Commissioner (Appeals). 9. Under Section 11BB of the Central Excise Act, there is an obligation upon the respondents to pay the interest at the prescribed rate immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty, which in the present case is from 24-4-2005 to 10-3-2010. The case of the respondent is that wit....
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....s not entitled to payment of interest on the refund amount. The petitioner would, therefore, be entitled to interest on the amount of Rs. 28,94,776/- from 24-4-2005 till the actual payment i.e. up to 10-3-2010. 10. Insofar as the prayer for interest on interest is concerned, the learned advocate for the petitioner fairly stated that in view of the decision of the Supreme Court in the case of Commissioner of Income Tax, Gujarat v. Gujarat Fluoro Chemicals (supra), such relief cannot be granted. He, however, has submitted that the petitioner should be compensated for the prejudice caused to it due to inordinate delay in payment after the lapse of statutory period. In the opinion of this Court, the petitioner was required to unnecessarily litigate in two rounds; in the first round, up-till the Tribunal and in the second round, up to this Court, for the purpose of availing of the statutory interest payable to it. Under the circumstances, while the Court is of the view that the petitioner is entitled to the grant of compensatory costs, which are quantified at Rs. 25,000/-." In this case the interest on the refund was curtailed and interest was not sanctioned for the period a....
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....ances, the provisions of Section 11BB of the Act would clearly be attracted and as such the Tribunal was justified in holding that the provisions of clause (c) of the proviso to sub-section (2) of Section 11B and consequently Section 11BB of the Act are clearly applicable to the facts of the present case and as such the respondent is entitled to interest on delayed refund of Cenvat Credit as claimed by it." It is seen that the said decision relates to refund under Rule 5 of the Cenvat Credit Rules and therefore, the facts of the case are different. Section 11 B specifically excludes from the applicability of unjust enrichment to the cases of refund of cenvat credit of excisable goods by clause (c) of the third proviso to section 11 B. Thus, it implies that such cases are covered by section 11 B. 4.3 Learned Counsel also relied on the decision of Hon'ble High Court of Gujarat in the case of M/s Rawmin Mining and Industries Pvt Ltd .The said case also relates to refund under Notification No 41/2007-ST dated 06.10.2007 which is operated by allowing refund as an exemption in respect of goods exported. In para 11 following have been observed:- "11. It is undisputed fact i....
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....ed that in the case of Contemporary Packaging Technologies P Ltd the jurisdictional Hon'ble High Court of Gujarat has observed as follows :- "18. As can be noted from the record that, in the instant case, the petitioner-company has paid higher rate of duty on goods under protest for the period from July, 1993 to March, 1994 undisputedly provisionally. The assessment came to be finalized by the Tribunal on 29-12-1996 in the proceedings where classification dispute was put at rest. Admittedly, no duty was paid for which the refund claim has been preferred by the petitioner after the final assessment was ordered under Rule 9B(5) of the Rules and the entire refund claim was for the period during which the assessment was admittedly provisional. Therefore, any excess duty paid at the time of provisional assessment needed to be refunded without even any claim being required to be made by petitioner assessee, on finalization of assessment. 18.1 The Tribunal in its order insisted that if a claim for refund of duty is to be accepted, it is required to be established by the petitioner that it has not passed the burden of duty to others. Reiteratively, it is empha....
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.... goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that "when the duty leviable on the goods is asssessed finally in accordance with the provisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short of or is in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be". Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B, as the case may be. However, if the final orders passed under sub-rule (5) are appealed against - or questioned in a writ petition or suit, as the case may be, assuming that such a writ or suit is entertained and is allowed/decreed - then any refund claim arising as a consequence of the decision in such appeal or such other proceedings, as the case may be, would be governed by Section 11B. It is also made clear that if an independent refund claim is filed after the final decision under Rule 9B(....