TaxTMI 
TaxTMI 
2026 (2) TMI 230
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.... manufacturers located in the State of Jammu and Kashmir to such manufacturers but materials supplied by them treated as duty paid goods. The Appellant availed CENVAT Credit of duty paid on raw materials received from manufacturers based in the State of Jammu and Kashmir from other manufacturers and subsequently claimed rebate of such CENVAT credit after export of finished goods. An enquiry was initiated by the officers of the Central Excise Commissionerate, Meerut-II against the Appellant on the ground that he was availing of CENVAT credit only on the basis of invoices issued by the manufacturers based at Jammu and Kashmir State without receipt of any goods from them. 3. During the investigation the Appellant deposited Rs.10,00,000/- to avoid any coercive action by the Department though he did not agree with the allegation of any misuse and misdoing in relation to availment of CENVAT credit. At the end of the investigation, four Show Cause Notices [SCN] were issued for recovery of CENVAT credit availed by the Appellant in respect of raw materials said to have been received from the manufacturers based at Jammu and Kashmir State covering different periods from 2003-04 to June, 2....
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.... @12% from the date of deposit of the amount to the date of sanction of refund of such amount. 7. Learned Departmental Authorized Representative Shri Santosh Kumar appearing for the Revenue has defended the impugned Order-in-Appeal and contended that the interest is payable as per provisions of Section 11BB of the Central Excise Act, 1944. 8. Heard both the sides and perused the appeal records. 9. The short issue for my consideration is whether interest is liable to be paid on the sanctioned amount of refund in accordance with provisions of Section 11BB of the Central Excise Act, 1944 or otherwise. In this context, I find that under Section 11BB, interest is required to be paid from expiry of three months period from the date of application for refund of duty where refund of duty is ordered under Section 11B of the Central Excise Act, 1944. Under the provisions of Central Excise Act, 1944 and Rules made thereunder, duty is required to be paid after self-assessment as provided under Rule 6 of the Central Excise Rules, 2002 which provides that assessee would himself assess the duty payable on any excisable goods. Such assessed duty is paid in the manner as prescribed under R....
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....he said judgment is rendered, in my considered opinion under similar circumstances. So also in Kuil Fire Works Industries v. Collector of Central of Excise [1997 (95) E.L.T. 3 (S.C.), the pre-deposit made by the assessee was directed to be returned to him with 12% interest." 11. The Tribunal in the case of Ghaziabad Ship Breakers Pvt. Ltd. Vs. Commissioner of Customs MANU/CS/0290/2010 has held that interest @12% shall be allowable for the period the amount remained kept/deposited with the Department, to till the date of refund. Subsequently, the Tribunal, in a very latest case of Arihant Tiles and Marbles Pvt. Ltd. MANU/CE/0346/2019, has held that interest by way of compensation is allowable relying upon the judgment in the case of Sandvik Asia Ltd. 2006 (196) E.L.T. 257 (SC). Further, the Tribunal in the case of Marshall Foundry & Engg. (P) Ltd Vs. CGST Excise Appeal No.60916/2019-Ex(SM) (Date of pronouncement 28.11.2019), while discussing the entire law on the subject, has held that the Appellant is entitled to claim interest for the period the amounts remained with the Department i.e. from the date of deposits made during investigation to till, the amount is actually refunded....
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....ot below ten per cent., and not exceeding thirty six per cent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette. 33. There is no provision in the Excise Act, which deals with refund of revenue deposit and so rate interest has not been prescribed, when revenue deposit is required to be refunded." The Tribunal in the said case had allowed the interest on the refund amount from the date of deposit till the date of payment thereof. 7. I further observe that Hon'ble Supreme Court also in the case of Commissioner of Customs (Import), Raigad vs M/s. Finacord Chemicals (P) Ltd. in Civil Appeal no. 1633-1638 of 2004 as decided on 08.04.2015 reported as 2015 (319) E.L.T. 616 (S.C.) 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 enrichm....
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....49 (All) has held that once the confiscation has been set aside, confiscation of seized currency has been set aside and the fact is that the Department has earned interest during the period the currency was retained by it, it was held that payment of interest could not be denied merely for the reason that there is no express statutory provision. Bombay High Court also in the case of Union of India Vs. M P Desal reported as 2019 (366) ELT 251 (Bom) has held that amount seized in cash by the authorities is to be refunded along with the interest. Though in this case the rate of interest was held to be simple at the rate of 8%. However, there already has been decisions of Kerala High Court in the case of Sony Pictures Networks India Pvt. Ltd. Vs. UOI reported as 2017 (353) ELT 179 (Ker) wherein the decision of Hon'ble Apex Court in the case of Kuil Fireworks Inds. Vs. Collector reported as 1997 (95) ELT 3 (SC) is relied and it was held that rate of interest while refunding the amounts has to be 12% of the amount refunded. 10. I also draw our support from the decision of Hon'ble Apex Court in the case of Sandvik Asia Ltd. which is now the law of land in terms of Article 141....
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....es, 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's Advanced Law Lexicon 3rd Edition 2005 page 918 as follows: "An act which a Court orders to be done, or money which a Court orders to be paid, by a person whose acts or omissions have caused loss or injury to another in order that thereby the person damnified may receive equal value for his loss, or be made whole in respect of his injury; the consideration or price of a privilege purchased; something given or obtained as an equivalent; the rendering of an equivalent in value or amount; an equivalent given for property taken or for an injury done to another; the giving back an equivalent in either money which is but the measure of value, or in actual value otherwise conferred; a recompense in value; a recompense given for a thing received recompense for the whole injury suffered; remuneration or satisfaction for injury or damage of every description; remuneration for loss of time, necessary expenditures, and for permanent disability if such be the result; remuneration for the inju....
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....ble at the rate of 12% per annum. The previous judgment of Hon'ble Apex Court in the case of I.T.C. Ltd. (supra) has been relied upon, where the Apex court confined the rate of interest to 12% and further held that any judgment or decision of any high court taking a contrary view will be no longer a good law. The case law as relied upon by the appellant has been discussed by this Tribunal in the case of Riba Textiles Ltd. (supra) holding that those decisions are not applicable for the refund of the amount of pre deposit. 14. The above entire discussion makes it clear that the amount in question was an amount in the form of pre-deposit. Hence, it is the refund in terms of Section 35FF. However, the interest on sanctioned amount of refund has been denied on the ground that refund has been sanctioned within three months from the date of communication of the order of appellate authority in terms of the pre amended Section 35FF of Central Excise Act, 1944. I observe that Section 35FF stands amended w.e.f. 06.08.2014 read as follows: Section 35FF. Interest on delayed refund of amount deposited under Section 35F.- "Where an amount deposited by the appellant unde....