TaxTMI 
TaxTMI 
2025 (4) TMI 1578
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....rts. A part of amount was treated as pre-deposit and therefore, entitled for refund in accordance with provisions under section 35FF of the Central Excise Act, 1944 (hereinafter referred to as the Act), whereas, the remaining amount of the claim i.e. Rs.1,16,05,656/- was treated by him as being governed by section 11B of the Act and therefore, no interest was paid thereon as the refund has been made well within the time limit prescribed under the law. The Adjudicating Authority has mainly relied on the Circular No.984/08/2014-CX dt.16.09.2014 for deciding the claim of refund, the relevant para of which has been extracted in the impugned order at para 8. The appellants are in appeal against interest calculated by RSA in respect of deposit made by them in the course of enquiry, which became refundable to them in terms of the Order of the Tribunal. 3. Learned Advocate for the appellant is mainly contesting that the amount paid under protest is in the nature of revenue deposit and hence, it will not be covered by section 11B of the Act. They have placed reliance on the following judgments:- a) Sunrise Immigration Consultants Pvt Ltd Vs CCE [2023 (4) TMI 504 - CESTAT Chandig....
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....CT, Guntur [2019 (367) ELT 669 (Tri- Hyd)] f) India Cements Vs CCE, Medchal [Final Order - A/30081/2024 dt.23.02.2024 (Tri-Hyd)] 7. Heard both sides and perused the records. 8. From the perusal of the case records, I find that pursuant to the Final Order of the Tribunal dt.06.10.2023, the appellants filed refund application dt.12.12.2023, wherein, inter alia, they had shown the amount of Rs.1,28,95,173/-, being an amount deposited by them, on various dates and therefore, sought refund of the said amount along with applicable interest. Having regard to the circular dt.16.09.2014, the RSA has split the refund amount into two categories. In terms of section 35F, it has been calculated that an amount of Rs.9,67,138/- was the amount of pre-deposit @ 7.5% (before Commissioner (Appeals)) and an amount of Rs.3,22,379/- was the amount of pre-deposit @ 2.5% (before Tribunal) and the applicable interest @ 6% on the said amounts of pre-deposit from the date of filing of respective appeals would be Rs.3,99,203/- and Rs.1,16,328/- respectively. The appellants are contesting that apart from the fact that they are entitled for refund on the entire amount from the date of deposit its....
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....and it also provides for limitation within which refund can be claimed under that section. It also provides that the refund, if found eligible, is to be credited to the fund except under certain circumstances as provided in proviso to section 11B(2). Further, it also, by virtue of explanation, provides that refund includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India. 10. Section 11BB provides for interest on delayed refund of duty amount under section 11B(2) in case the said refund is not made within three months from the date of receipt of application under sub-section (1) of that section. Therefore, first issue is whether the amount for which the refund has been claimed is in the nature of duty and therefore, governed by section 11B or otherwise. The terms duty of excise has been defined in the charging section of the Act i.e., section 3, wherein, it has been stipulated that it should be levied and collected in such manner as may be prescribed a duty of excise to be called the Central Value Added Tax (CENVAT) on all excisable goods (excluding goods produced or manuf....
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....n applied had it been treated as a case of refund of duty of excise governed by section 11B of the Act. 13.1. I have also perused the circular, which has been relied upon by the RSA. It is obvious that for the purpose of section 35F, at para 3, the payments made during the course of investigation or audit, prior to the date on which appeal is filed, to the extent of 7.5% or 10%, subject to the limit of Rs.10 crores, can be considered to be deposit made towards fulfillment of stipulation under section 35F. It further provides that the said amount paid during the investigation or audit, takes the color of deposit under section 35F only when the appeal is filed. Further, at para 5.2, it also clarifies that pre-deposit for filing the appeal is not payment of duty. Hence, refund of pre-deposit need not be subjected to process of refund of duty under section 11B of the Act. 13.2. In this case, it is also on record that the amount paid in the course of enquiry/audit was appropriated by the Adjudicating Authority. Therefore, if a part of this is being again apportioned or applied towards pre-deposit under section 35F and that part is not being treated as duty, it would amount to re-a....
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.... 14. Coming to the various judgments cited by the appellant, I find that in Parle Agro Pvt Ltd Vs CCE (supra), at para 30, the Tribunal held that the provisions of section 11B of the Act would not be applicable as the appellant was not claiming refund of duty and has, in fact, claimed refund of revenue deposit. The facts of the case were that during the pendency of the investigation, the appellant had made certain payments by way of debit in PLA with endorsements that the amount was being paid under protest. It was also observed by the Tribunal that there is neither a provision in the Excise Act, which deals with the refund of revenue deposit nor rate of interest has been prescribed when revenue deposit is required to be refunded. Similarly, in the case of Bagadiya Brothers Pvt Ltd & Others Vs CC (supra), where certain amount was voluntarily paid by the assessee under protest, it was held, inter alia, that the said payment, which was made under protest during the investigation takes the character of revenue deposit. It also took into account the judgment of Hon'ble Delhi High Court in the case of Team HR Services Pvt Ltd Vs UOI & Anr [2020 (6) TMI 342 - HC Del]. In the case of Pa....
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...., as held by Commissioner (Appeals) in his impugned order while upholding the order of the RSA. The reliance placed by the Revenue on the judgment of Hon'ble Supreme Court in the case of Union of India Vs Willowood Chemicals Pvt Ltd (supra) is also misplaced inasmuch as this judgment is in respect of interest on delayed refund under IGST Act, whereas, in the present case, the issue is under section 11B of Central Excise Act. Therefore, the facts are distinguished. The reliance placed by Revenue on Single Member Bench decision in the case of M/s Spicejet & Others Vs CCT, Hyderabad (supra) is also not correct as the issue before the Bench was the condonation of delay, whereas, in this case, it is grant of refund of revenue deposit. Further, though the Tribunal is a creature of statute, when there is no provision within the statute, the reliance can be placed on the decisions of higher judicial forums to decide the case. Therefore, the issue in the present appeal is not regarding going beyond the statutory provisions. The reliance placed by the Revenue on the Single Member decision in the case of M/s SKJ Metals Company Vs CCE, Agra (supra), where a very detailed order has been passed,....
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....mewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B. [See: Alok Shanker Pandey v. Union of India : AIR 2007 SC 1198.]" 19. As per Stroud's Judicial Dictionary of Words and Phrases (5th edn.): interest means, inter alia, compensation paid by the borrower to the lender for deprivation of the use of his money. 20. In the case of Secretary, Irrigation Department, Government of Orissa v. G.C. Roy, (1992) 1 SCC 508, a Constitution Bench of this Court opined that a person deprived of use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This is also the principle of Section 34 of the Civil Procedure Code. 22. In the case of Commissioner of Income Tax v. Dr. Sham Lal Narula, AIR 1963 Punjab 411, a Division Bench of the High Court of Punjab articulated the concept of interest as under:- "The words 'interest' and 'compensation' are sometimes use....
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....8 SCC 648. This Court explained the principles of restitution in the case of O.N.G.C. Ltd. (supra) as under:- "Appellant is a public sector undertaking. Respondent is the Central Government. We agree that in principle as also in equity the appellant is entitled to interest on the amount deposited on application of principle of restitution. In the facts and circumstances of this case and particularly having regard to the fact that the amount paid by the appellant has already been refunded, we direct that the amount deposited by the appellant shall carry interest at the rate of 6% per annum. Reference in this connection may be made to Pure Helium Indian (P) Ltd. v. Oil & Natural Gas Commission, JT 2003 (Suppl. 2) SC 596 and Mcdermott International Inc. v. Burn Standard Co. Ltd. JT 2006 (11) SC 376." (Emphasis supplied) 29. In the case of Union of India through Director of Income Tax v. Tata Chemicals Ltd., (2014) 6 SCC 335, this Court held that when the collection is illegal, the Revenue is obliged to refund such amount with interest as money so deposited was retained and enjoyed by it. No discrimination can be shown between the assessee and Revenue in payi....