TaxTMI 
TaxTMI 
2025 (11) TMI 1198
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....use department appeal on same issue was pending before the Hon'ble Apex Court and the same was decided as "Dismissed as Withdrawn" vide order dated 19.11.2020. After dismissal of departmental appeal, the Assistant Commissioner dropped the case against the appellant and appellant filed refund claim of Rs.13,88,024/- which was sanctioned by the adjudicating authority. Being aggrieved from the said order both the appellant and the Revenue filed appeal before learned Commissioner (Appeals). The Revenue claimed that the refund claim is hit bar of unjust enrichment and appellant claimed interest from the date of deposit. The Commissioner (Appeals) in the case of department remanded back to matter to the adjudicating authority and rejected the demand of interest claimed by the appellant from the date of deposit. Therefore, the appellant filed an appeal challenging the impugned order and claiming interest from the date of deposit. 2. In remand proceedings, the Assistant Commissioner sanctioned the refund claim of Rs.13,88,024/- but interest was not granted. So the only issue is to be decided by me that from which date appellant is entitled to claim interest on the said amount. 3. Lea....
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.... collected from the assessee on account of purported liability to pay duty, which was ultimately proved to have been wrongly foisted. Therefore, in our opinion, it only be right that the Revenue be called upon to pay interest to the assessee because, by its nature, any such collection of money be Revenue can only be termed as exaction under ostensible authority of law." 6. From the decision it is clear that any amount received during investigation is Revenue Deposit hence cannot be retained for want of any authority of law to retain such amount. Unless there is valid demand against the depositor, it must be refunded with interest from the date it was wrongly collected. Reliance is also placed on Hon'ble Supreme Court's judgment in the case of kuil Fireworks Industries Vs. Collector of Central Excise reported as 1997 (95) E.L.T. 3 (SC), wherein Hon'ble Supreme Court ordered predeposit made by assessee to be returned with 12% interest since the demand reaised by the Collector was quashed by the Supreme Court. But Commissioner (Appeals) has allowed, the appeal with the directions to the Refund Sanctioning Authority to allow payment of interest from the date of deposit till the fina....
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.... 1633-1638 of 2004 as decided on 08.04.2015 reported as 2015 (319) E.L.T. 616 (S.C.) also while discussing the liability of the department to pay the interest has referred to Departments' own circular dated 02.01.2002 wherein the Board clarified that the matters of refund other than the amount of duty would not be covered under the provisions of Section 11B of Customs Act or Section 35FF of Central Excise Act. It was held by the Hon'ble Apex Court that in such cases of refund even the concept of unjust enrichment is not applicable. Learned Apex Court has relied upon its decision in SLP titled as Union of India vs Suvidhe Ltd. in which decision of Bombay High Court in Suvidhe Ltd. vs Union of India reported as 1996 (82) ELT 177 has been upheld. The Bombay High Court has observed that in case of deposits which were not in the form of duty, provisions of 11B of Customs Act will have no applicability. The deposits made under Section 35FF since is not the payment of duty, Section 11B will not be applicable. 9. Another circular of department bearing No. 802/35/2004 CX dated 08.12.2004 was also being considered by the Apex Court in the above mentioned judgment dated 08.04 2015.....
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....nce as per the stand that the Department takes they are liable to pay 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 that 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 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. RamanathaAiyar&#....
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....e notifications/circulars/instructions issued from time to time including those issued by the CBEC. There is no scope at all to collect duty and that too without even quantifying the extent of duty evasion". 12. From the above discussion about various decisions, it is clear that Section 11B and 11BB of Central Excise Act will not be applicable to the amount in question. The assessee is entitled for interest on the amount deposited during investigation. Otherwise also, as per the Article 300A of Constitution of India also, no person shall be deprived of his property, save by authority of law. Once the demand proposed under five show cause notices is set aside, it becomes clear that the money deposited continues to be the appellant's property. He cannot be deprived of the same and is entitled for benefits arising out of said property. Hence interest accrued on the amount in question during the period it was in fixed deposit is the property of the owner of the amount i.e. the appellant herein. It was otherwise, involuntary deposited. 13. Following the said law of land, I hold that the appellants are entitled to claim the interest on the amount as has been refunded in t....
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....g of the Apex Court in Sandvik Asia Ltd. Vs. Commissioner - 2006 (196) E.L.T. 257 (S.C.). I further direct the Adjudicating Authority to grant interest @ 12% per annum from the date of deposit till the date of refund. Such interest should be granted within a period of two months from the date of receipt or service of the copy of this order." 16. Similar view was taken in case of Pr. Commr. of CGST, New Delhi Vs. Emmar Mgf Construction Pvt. Ltd. reported as 2021 (55) GSTL 311 (Tri.-Del.) wherein it was held that amount deposited during investigation and/or pending litigation is ipso facto pre-deposit and interest is payable on such amount to the assessee being successful in appeal, from the date of deposit till the date of refund. Further, it is directed that the adjudicating authority shall disburse the amount of interest @ 12% per annum forthwith. "8. Considering the rival contentions, this appeal by the Revenue is dismissed. Further, it is directed that the Adjudicating Authority shall disburse the amount of interest @12% per annum forthwith, within a period of 45 days from the date of receipt of the copy of this order, as held by Division Bench of this Tribunal in Pa....