TaxTMI 
TaxTMI 
2025 (6) TMI 756
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....puty Commissioner, Central GST, Division-II (Pimpri) of Pune Commissionerate rejecting the claim of interest on refund. 2. The issue involved herein is whether appellant is entitled to interest on refund amount when the refund was sanctioned within two months of the filing the refund application? 3. The appellant is engaged in undertaking turnkey projects as well as manufacturing activity. During the course of investigation into the activities of the appellant in the year 2006 regarding undervaluation etc. the appellant deposited Rs. 16 lakhs [Rs.6 lakhs on 21.6.2006 through CENVAT reversal + Rs. 10 lakhs in cash on 1.7.2006]. Show cause notice dated 21.11.2008 alleging undervaluation and demanding short payment of duty was issued. Though....
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....IT; 2006(196) ELT 257(SC), Ranbaxy Laboratories Ltd. Vs. UOI; 2011-TIOL-SC-CX and Kull Fire Works vs. CCE; 1997(95)ELT 3 (SC). 5. Per contra learned Authorised Representative appearing on behalf of Revenue reiterated the findings recorded in the impugned order and prayed for dismissal of appeal filed by the appellant. According to learned Authorised Representative the amount paid by the appellant during investigation is towards payment of duty only and is liable to be refunded only as per the provisions of Section 11B of Central Excise Act, 1944 and the interest, if any payable, is governed strictly by Section 11BB ibid. In support of his submissions learned Authorised Representative also cited few decisions including the law laid down by ....
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....t with the adjudicating authority the duty demanded or the penalty levied....." [emphasis supplied]. In view of clear language there is no doubt that this provision is applicable only when the amount is deposited for availing the right of appeal. Section 11 B ibid can't be applicable on such deposits since it is not payment of duty but only a pre-deposit for filing appeal. Once section 35 F ibid is applicable, section 11B ibid has no application at all. It is undisputed that here the amount was deposited by the appellant during investigation and not as a pre-deposit u/s. 35F ibid for filing any appeal. Section 35FF ibid was added in the statute only w.e.f. 10.5.2008 and it prescribed for interest on delayed refunds of amount deposited u/s. ....
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....978-79, 1981-82 and 1982-83 and the Hon'ble Supreme Court specifically observed that in view of express provisions of Income Tax Act, assessee is entitled for compensation by way of interest on the delayed payment of due amount which was wrongly withheld by the department. 9. The aforesaid decision has been clarified by the Hon'ble Three Judges' Bench of the Hon'ble Supreme Court in the matter of CIT, Gujarat vs. Gujarat Fluoro Chemicals; 2017(51)STR 236 (SC) relevant paragraphs of which are reproduced hereunder:- " xxx xxx xxx 4. We would first throw light on the reasoning and the decision of this Court on the core issue in Sandvik case (supra). The only issue formulated by this Court for its consideration and decision was whether an....
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....of delay in the payment. In other words, the interpretation placed is that the Revenue is obliged to pay an interest on interest in the event of its failure to refund the interest payable within the statutory period. 7. As we have already noticed, in Sandvik case (supra) this Court was considering the issue whether an assessee who is made to wait for refund of interest for decades be compensated for the great prejudice caused to it due to the delay in its payment after the lapse of statutory period. In the facts of that case, this Court had come to the conclusion that there was an inordinate delay on the part of the Revenue in refunding certain amount which included the statutory interest and therefore, directed the Revenue to pay compen....