TaxTMI 
TaxTMI 
2026 (6) TMI 1359
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..... The assessment was made provisional during this period. During the period of provisional assessment, the Appellants were forced to pay higher amount on a pro-rata basis on the higher side. The Appellants paid this amount under protest. 3. The classification dispute was subsequently settled by this Tribunal vide Final Order No. A/70062/2022-EX [DB] dated 02.02.2022 in favour of the Appellants, holding that the product manufactured during the relevant period was Branded Chewing Tobacco. The Revenue challenged this decision before the Hon'ble Supreme Court, which was dismissed for non-condonation of delay. 4. The Appellants thereafter filed a refund claim for the excess amount of Rs.6,95,52,000/- vide an application dated 05.08.2022. Though the refund was sanctioned, the Adjudicating Authority credited the amount to the Consumer Welfare Fund vide Order-in-Original No.01/CE/PRE-GST/Refund/ACK-II/2023 dated 16.01.2023 on the ground of unjust enrichment, holding that the party failed to prove that the incidence of duty had not been passed on to the customers. 5. The Appellate Authority dismissed the Appellant's first appeal on 01.05.2023, upholding the unjust enrichment findin....
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....Kuil Fireworks Industries and also on the decision of this Tribunal in the case of M/s. Rathi Steels. 12. It was also pointed out by the Learned Advocate that in the impugned order itself, the Commissioner (Appeals) has considered the findings of his predecessor in order dated 07.02.2025 in Para 5.3 of the impugned order. He has also gone through various case laws in Para 5.5 to 5.7 of the impugned order wherein the interest from the date of deposit till the date of refund was held payable @12% p.a. However, the Commissioner (Appeals) has abruptly held that the period of computation of interest has rightly been taken by the Adjudicating Authority and that the interest @12% p.a. granted by Hon'ble High Courts are not applicable in all cases in rem. 13. It has also been agitated by the Ld. Advocate that excess amount was collected by the Revenue without authority of law and therefore it must compensate by granting the interest from the respective date of excess deposit till the date of payment of refund thereof. The Ld. Advocate has also placed reliance on many case laws of this Tribunal and various Appellate High Courts and Supreme Court. 14. Shri Prashant Kumar and Shr....
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....hasis Supplied] 18. It has also been stated by the Appellants in their rejoinder that the amount deposited by them was never payable by them inasmuch as it was not any determined liability and the payment was admittedly under protest since beginning. Whereas in the case of M/s Goldy Engineering Works ibid, the amount was deposited after issuance of the SCN and the said SCN resulted into confirmation of demand of duty. The amount deposited by the Appellants attains the nature of revenue deposit. The matter is therefore clearly distinguishable from the facts and circumstances of the case law relied upon by the Authorized Representative for the Revenue. 19. Heard both the sides and perused the appeal records. 20. The following two issues arise for determination in the present appeal:- (i) Whether interest on the delayed refund is payable from the respective date of deposit of the excess amount under protest, or from the expiry of three months after the date of filing the refund application? (ii) Whether the Appellants are entitled to interest at the rate of 12% per annum instead of the 6% per annum sanctioned by the lower Authorities? 21. To resolve these....
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....rty per cent per annum as is for the time being fixed [by the Central Government, by Notification in the Official Gazette], on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty : Provided that where any duty ordered to be refunded under sub-section (2) of section 11B in respect of an application under sub-section (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, till the date of refund of such duty." 24. After due perusal of Section 11BB of the Central Excise Act, it is very clear that the interest on delayed refunds of duty paid under Section 11B, the Central Excise Act will be applicable through this provision, only when the matter of concern is "refund of duty". The applicability of Section 11BB of the Central Excise Act, therefore, hinges upon the determination as to whether the amount refunded in the present case is in the nature o....
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....date of deposit till the date of refund. 29. The issue is no longer res integra in view of the decision of this Tribunal in Parle Agro (supra), which has been affirmed by the Hon'ble Allahabad High Court. It has been conclusively held therein that Section 11B/11BB of the Central Excise Act applies only to refunds of duty and has no application to refunds of revenue deposits. Consequently, the restriction contained in Section 11BB regarding commencement of interest after expiry of three months from the date of filing of the refund application cannot be imported into cases involving refund of revenue deposits. Therefore, the Appellate Authority, while passing the Impugned OIA, has failed to examine the applicability of Section 11BB of the Central Excise Act in the correct legal perspective and has mechanically denied interest from the date of deposit by treating the amount as duty, without recording any finding as to how the amount acquired the character of duty. 30. This position was further emphasized by this Tribunal in M/s Hindustan Mint & Agro Products Pvt. Ltd. (supra), wherein it was observed that under the provisions of the Central Excise Act, 1944, duty is payable on s....
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....ke the character of "duty", the statutory provisions governing refund of duty, including Sections 11B and 11BB of the Central Excise Act, cease to have any application. 35. It is also undisputed that the Central Excise Act does not contain any specific provision prescribing the rate of interest payable on refund of revenue deposits. In such circumstances, the rate of interest has been consistently determined by judicial precedents, based on principles of equity, fairness and reasonableness. 36. This issue is squarely covered by the decision of this Tribunal in M/s Parle Agro (supra), wherein, after examining the statutory scheme and the absence of any prescribed rate of interest for refund of revenue deposits, this Tribunal held that interest at the rate of 12% per annum is appropriate. The aforesaid decision of this Tribunal has been expressly affirmed by the Hon'ble Allahabad High Court in Principal Commissioner, Central Goods and Service Tax vs. M/s Parle Agro Private Limited (supra). The Hon'ble High Court has approved the grant of interest at the rate of 12% per annum in cases involving refund of revenue deposits, thereby lending authoritative approval to the said rate. ....