TaxTMI 
TaxTMI 
2026 (6) TMI 1358
X X X X Extracts X X X X
X X X X Extracts X X X X
....edule to Central Excise Tariff Act, 1985 exempted from payment of duty as per Notification No 03.2006-CE dated 01.03.2006 as amended. 2.2 During course of manufacture of the vegetable oils as above bye products fatty acid and residues classifiable under Chapter Heading 3823 and 1522 respectively also emerged. Appellant was paying duty on these bye products till January 2008. Thereafter they started claiming exemption under Notification No. 89/95-CE dated 18.05.1995. 2.3 Revenue objected to the claim made by the appellant that residue and fatty acids are exempted vide Notification No 85/95CE and show cause notices were issued to the appellant on regular basis denying the benefit of exemption and demanding the central excise duty due on this products. 2.4 Appellant as directed by the revenue deposited duty in respect of Fatty Acids or other by-products at the time of clearance of the said goods under protest and also did not recover the same from their consumers. 2.5 The matter in respect of the period prior to January 2014 were adjudicated by the jurisdictional authorities confirming the demand. On appeal, Commissioner (Appeals) set aside the order confirming the demand.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as been dismissed as per the impugned order. 2.11 Aggrieved appellant have filed this appeal. 3.1 I have heard Shri Amit Awasthi learned Counsel appearing for the appellant and Shri Santosh Kumar learned Authorized Representative appearing for the revenue. 3.2 Arguing for the appellant learned Counsel submits that- ⮚ Appellants are before this Hon'ble Bench, on the issue which is premised to the claim of interest, on account of the amount paid as Revenue Deposit, admittedly under protest and coercion by the Department, without shift of any incidence to the buyer of the product and the issue boiling down to an issue premised to the right of Restitution of original money, the principal amount already refunded and the current issue premises on the claim and rate to the interest, to the principal amount, which the Appellants lost and it is further submitted that the claim of interest, the stand alone issue involved in the present Appeal, adopts the mode of compensation / unjust impoverishment to the loss and evidently when there is no application of statutory bar to any mode of ascertainment of duty, indeed the law metamorphosis from the date, taking into a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ority of law. In this case indisputably it appears that tax was collected without the authority of law. Indeed the Appellant had to pay the tax in view of the notices which were without jurisdiction. In the premises it is manifest that the Respondent had no authority to retain the money collected without the authority of law and as such was liable to refund." ⮚ Appellant, elaborates the timeline, to highlight the originally filed refund claim, adoption of imbecile approach to the refund by the Department and re-filing and all these timeline, which are detailed herein below, would eventually get subsumed with the original claim of interest, which would see the genesis from the date of deposit in terms of reading of the Indian Contract Act 1872 and this timeline is discussed above, is detailed as below: (i) That the Appellants filed the original Refund Application on 22.05.2024 before the Assistant Commissioner, CGST & Central Excise, Div. Kanpur Dehat for an amount of Rs.19,87,934/- for the period January 2014 to July, 2014. (ii) The Department raised query on 08.08.2024 on the following points: a) The invoices issued by you in r/o the said....
X X X X Extracts X X X X
X X X X Extracts X X X X
....appellants have paid duty regularly under protest which shall be treated as a duty deposit (or deposit made under protest) rather than a final revenue deposit. Thus, in summary, duty paid under protest qualifies as a duty deposit (provisional in nature) and not a revenue deposit (final revenue). This allows refund claims to be filed under Section 11B. Thus for the refund of duty falling under section 11B, the payment of interest is governed under section 11BB of the Central Excise Act, 1944. The relevant portion of the same is given as under- 11-BB. Interest on delayed refunds. If any duty ordered to be refunded under sub-section (2) of Section 11-B to any applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, [not below five per cent and not exceeding thirty 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: Provi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ay. ⮚ The entire amount was deposited by them under protest, during the period January 2014 to July 2014. Hence in respect of the amount so deposited the interest should be paid from the date of deposit to the date of grant of refund. 4.4 I find that the issue is squarely covered by the decision of Hon'ble Supreme Court (Constitutional Bench 9 Judges) in the case of Mafatlal Industries [1997 (89) ELT 247 (SC)]. The relevant paragraphs from this judgement are reproduced below: "15. The validity of the aforesaid provisions (providing a period of limitation for making claims of refund and declaring that no refund claim shall be entertained except under and in accordance with the said provisions) has never been challenged seriously. Though in certain writ petitions now before us, validity of Section 11B (as amended in 1991) is challenged - which challenge is dealt with hereinafter and rejected - the main submission of Sri F.S. Nariman, leading the arguments on behalf of the appellants-petitioners has been that these provisions do not preclude the filing of a suit or the filing of a writ petition claiming refund where the tax has been collected contrary to la....
X X X X Extracts X X X X
X X X X Extracts X X X X
....authorities under the Act by mis-construction or wrong interpretation of the provisions of the Act, Rules and Notifications or by an erroneous determination of the relevant facts, i.e., an erroneous finding of fact. This class of cases may be called, for the sake of convenience, as illegal levy. In this class of cases, the claim for refund arises under the provisions of the Act. In other words, these are situations contemplated by, and provided for by, the Act and the Rules. 19. The above distinction is not only accepted in all jurisdictions but is also not disputed before us. 20. So far as the first category (unconstitutional levy) is concerned, there is no dispute before us that it is open to the person claiming refund to either file a suit for recovery of the tax collected from him or to file a writ petition under Article 226 of the Constitution for an appropriate direction of refund. The only controversy on this score is whether the manufacturer/payer is entitled to such refund where he has already passed on the burden of the duty to others. 21. With respect to the second category of cases, there is a good amount of controversy. While the Union of Ind....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ay not be a decision of the Supreme Court that lead `X' to discover his mistake; it may be a decision of the High Court. It may also be a case where `X' fights up to first appellate or second appellate stage, gives up the fight, pays the tax and then pleads that he has discovered the mistake of law when the High Court has declared the law. The fact is that such claims have been entertained both in writ petitions and suits until now, purporting to follow the law declared in Kanhaiyalal, and are being allowed and decreed, sometimes even with interest. The Union of India says that this can never be. It says, a manufacturer must fight his own battle and only if he succeeds therein, can he claim refund. He cannot take advantage of success of another manufacturer and that no suit or writ is maintainable by him for refund on the ground of alleged discovery of mistake of law on the declaration of law by this Court or a High Court (or a Tribunal or any other authority under the Act) in the case of another person. The Union of India denies that such a person can plead payment of duty under a mistake of law within the meaning of Section 72 of the Contract Act. It also denies that such a writ ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble; and (4) whether the spending away of the taxes collected by the State is not a good defence to a claim for refund of taxes collected contrary to law. 68. Re. : (I) : Hereinbefore, we have referred to the provisions relating to refund obtaining from time to time under the Central Excises and Salt Act. Whether it is Rule 11 (as it stood from time to time) or Section 11B (as it obtained before 1991 or subsequent thereto), they invariably purported to be exhaustive on the question of refund. Rule 11, as in force prior to August 6, 1977, stated that "no duties and charges which have been paid or have been adjusted....shall be refunded unless the claimant makes an application for such refund under his signature and lodges it to the proper officers within three months from the date of such payment or adjustment, as the case may be". Rule 11, as in force between August 6, 1977 and November 17, 1980 contained sub-rule (4) which expressly declared: "(4) Save as otherwise provided by or under this rule, no claim of refund of any duty shall be entertained". Section 11B, as in force prior to April, 1991 contained sub-section (4) in identical words. It said : "(4) Save as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntained adequate provisions for refund, for appeal, revision, rectification of mistake and for condonation of delay in filing appeal/revision. The Court pointed out that had the Bombay Act not provided these remedies and yet barred the resort to civil court, the constitutionality of Section 20 may have been in serious doubt, but since it does provide such remedies, its validity was beyond challenge. To repeat - and it is necessary to do so - so long as Section 11B is constitutionally valid, it has to be followed and given effect to. We can see no reason on which the constitutionality of the said provision - or a similar provision - can be doubted. It must also be remembered that Central Excises and Salt Act is a special enactment creating new and special obligations and rights, which at the same time prescribes the procedure for levy, assessment, collection, refund and all other incidental and ancillary provisions. As pointed out in the Statement of Objects and Reasons appended to the Bill which became the Act, the Act along with the Rules was intended to "form a complete central excise code". The idea was "to consolidate in a single enactment all the laws relating to central dutie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ares that no claim for refund of any duty shall be entertained except in accordance with the said provision, it is not permissible to resort to Section 72 of the Contract Act to do precisely that which is expressly prohibited by the said provisions. In other words, it is not permissible to claim refund by invoking Section 72 as a separate and independent remedy when such a course is expressly barred by the provisions in the Act, viz., Rule 11 and Section 11B. For this reason, a suit for refund would also not lie. Taking any other view would amount to nullifying the provisions in Rule 11/Section 11B, which, it needs no emphasis, cannot be done. It, therefore, follows that any and every claim for refund of excise duty can be made only under and in accordance with Rule 11 or Section 11B, as the case may be, in the forums provided by the Act. No suit can be filed for refund of duty invoking Section 72 of the Contract Act. So far as the jurisdiction of the High Court under Article 226 - or for that matter, the jurisdiction of this court under Article 32 - is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sult of declaration of unconstitutionality of a provision of the enactment can also be looked at as a statutory right of restitution. It can be said in such a case that the tax paid has been paid under a mistake of law which mistake of law was discovered by the manufacturer/assessee on the declaration of invalidity of the provision by the court. Section 72 of the Contract Act may be attracted to such a case and a claim for refund of tax on this score can be maintained with reference to Section 72. This too, however, does not mean that the taxes paid under an unconstitutional provision of law are automatically refundable under Section 72. Section 72 contains a rule of equity and once it is a rule of equity, it necessarily follows that equitable considerations are relevant in applying the said rule - an aspect which we shall deal with a little later. Thus, whether the right to refund of taxes paid under an unconstitutional provision of law is treated as a constitutional right flowing from Article 265 or as a statutory right/equitable right affirmed by Section 72 of the Contract Act, the result is the same - there is no automatic or unconditional right to refund. 70. Re : (II....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g to the finality of any proceeding, be it a suit or any other proceeding. Where a duty has been collected under a particular order which has become final, the refund of that duty cannot be claimed unless the order (whether it is an order of assessment, adjudication or any other order under which the duty is paid) is set aside according to law. So long as that order stands, the duty cannot be recovered back nor can any claim for its refund be entertained. But what is happening now is that the duty which has been paid under a proceeding which has become final long ago - may be an year back, ten years back or even twenty or more years back - is sought to be recovered on the ground of alleged discovery of mistake of law on the basis of a decision of a High Court or the Supreme Court. It is necessary to point out in this behalf that for filing an appeal or for adopting a remedy provided by the Act, the limitation generally prescribed is about three months (little more or less does not matter). But according to the present practice, writs and suits are being filed after lapse of a long number of years and the rule of limitation applicable in that behalf is said to be three year....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... their jurisdiction. Whether or not a return is correct and whether a transaction is exigible to tax or not are all matters to be determined by the authorities under the Act. The argument that the finding of the authority that a particular transaction is taxable under the Act is a finding on a collateral fact and, therefore, resort to civil court is open, was expressly rejected and it was affirmed that the whole activity of assessment beginning with the filing of the return and ending with the order of assessment falls within the jurisdiction of the authorities under the Act and no part of it can be said to constitute a collateral activity not specifically or expressly included in the jurisdiction of the authorities under the Act. It was clarified that even if the authority under the Act holds erroneously, while exercising its jurisdiction and powers under the Act that a transaction is taxable, it cannot be said that the decision of the authority is without jurisdiction. We respectfully agree with the above propositions and hold that the said principles apply with equal force in the case of both the Central Excises and Salt Act and the Customs Act. Once this is so, it is un-underst....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ations of Hidayatullah, CJ. in Tilokchand Motichand extracted in Para 37). The decisions of this Court saying to the contrary must be held to have been decided wrongly and are accordingly overruled herewith. 71. Re. : (III) : For the purpose of this discussion, we take the situation arising from the declaration of invalidity of a provision of the Act under which duty has been paid or collected, as the basis, inasmuch as that is the only situation surviving in view of our holding on (I) and (II). In such cases, the claim for refund is maintainable by virtue of the declaration contained in Article 265 as also under Section 72 of the Contract Act as explained hereinbefore, subject to one exception : where a person approaches the High Court or Supreme Court challenging the constitutional validity of a provision but fails, he cannot take advantage of the declaration of unconstitutionality obtained by another person on another ground; this is for the reason that so far as he is concerned, the decision has become final and cannot be re-opened on the basis of a decision on another person's case; this is the ratio of the opinion of Hidayatullah, CJ. in Tilokchand Motichand and we r....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... person who has really borne the burden of duty; the manufacturer who is the claimant has certainly net borne the duty notwithstanding the fact that it is he who has paid the duty. Where such a claim is made, it would be wholly permissible for the court to call upon the petitioner/plaintiff to establish that he has not passed on the burden of duty to a third party and to deny the relief of refund if he is not able to establish the same, as has been done by this Court in I.T C. In this connection, it is necessary to remember that whether the burden of the duty has been passed on to a third party is a matter within the exclusive knowledge of the manufacturer. He has the relevant evidence - best evidence - in his possession. Nobody else can be reasonably called upon to prove that fact. Since the manufacturer is claiming the refund and also because the fact of passing on the burden of duty is within his special and exclusive knowledge, it is for him to allege and establish that he has not passed on the duty to a third party. This is the requirement which flows from the fact that Section 72 is an equitable provision and that it incorporates a rule of equity. This requirement fl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....principle) - for that matter, in construing any other provision of the Constitution and the laws. Accordingly, we hold that even looked at from the constitutional angle, the right to refund of tax paid under an unconstitutional provision of law is not an absolute or an unconditional right. Similar is the position even if Article 265 can be invoked - we have held, it cannot be - for claiming refund of taxes collected by misinterpretation or misapplication of a provision of law, rules, notifications or regulation. 83. It is then pointed out by the learned Counsel for the petitioners-appellants that if the above interpretation is placed upon amended Section 11B, a curious consequence will follow. It is submitted that a claim for refund has to be filed within six months from the relevant date according to Section 11B and the expression "relevant date" has been defined n Clause (B) of the Explanation appended to sub-section (1) of Section 11B to mean the date of payment of duty in cases other than those falling under Clauses (a), (b), (c), (d) and (e) of the said Explanation. It is submitted that Clauses (a) to (e) deal with certain specific situations whereas the one applicabl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r protest" but it does not empower the proper officer, to whom the letter of protest is given, to sit in judgment over the grounds. The assessee need not particularise the grounds of protest. It is open to him to say that according to him, the duty is not exigible according to law. All that the proper officer is empowered to do is to acknowledge the letter of protest when delivered to him - and that acknowledgement shall be the proof that the duty has been paid under protest. A reading of the rule shows that the procedure prescribed therein is evolved only with a view to keep a record of the payment of duty under protest. It is meant to obviate any dispute whether the payment is made under protest or not. Any person paying the duty under protest has to follow the procedure prescribed by the Rule and once he does so, it shall be taken that he has paid the duty under protest. The period of limitation of six months will then have no application to him. 86. We may clarify at this stage that when the duty is paid under the orders of Court (whether by way of an order granting stay, suspension, injunction or otherwise) pending an appeal/reference/writ petition, it will certainly ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies, imposed thereunder . Section 11B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition (ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal - which is not a departmental organ - but to this Court, which is a civil court. (v) Article 265 of the Constitution has to be construed in the light of the goal and the ideals set out in the Preamble to the Constitution and in Articles 38 and 39 thereof. The concept of economic justice demands that in the case of indirect taxes Central Excises duties and Customs duties, the tax collected without the authority....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er mistake of law, was held to be outside the ambit of the Excise Act and the limitation applicable was held to be that specified under Section 17(1)(c) of the Limitation Act. The other aspect on which dissent is expressed, was with respect to an assessee's challenge to the constitutionality having failed and later, the view being reversed. In such cases Ahmadi, C.J., was of the opinion that the assessee's remedy cannot be held to be foreclosed and he should be left to legal remedies of review etc. of the earlier order. 9. The Learned Single Judge who referred the matter, rightly noticed the different views expressed, which however on the question of mistake of law and the manner in which refund has to be applied for; we have to concede to the majority view of five Learned Judges. From the above extracts, it has to be noticed that Justice B.P. Jeevan Reddy in his majority judgment; concurred to by a majority of five out of nine, held the refund to be possible only under the provisions of the Act. We need only refer to the category of payment under a mistake of law. We do not agree with the Learned Single Judge that the facts of the case discussed in WP (C) No. 18126/2015 d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....und, including violation of principles of natural justice and infraction of fundamental principles of judicial procedure has to be urged under the provisions in the Act, obviating the necessity of a suit or a writ petition in matters relating to a refund. The only exception provided was when there was a declaration of unconstitutionality of the provisions of the Act, in which event, a refund claimed could be otherwise than under Section 11B. We, specifically, emphasise the underlined portion in paragraph 79 of the cited decision as extracted hereinabove. The earlier view that the limitation was three years from the date of discovery of mistake of law was specifically differed from, since the refund had to be under the remedy as provided in the statute, which prescribed a limitation. 11. At the risk of repetition, here, the assessees paid up the tax and later realised that they are entitled to exemption. Going by the majority judgment, in Mafatlal Industries Limited (supra), we have to find such cases being subjected to the rigour of limitation as provided under Section 11B. The limitation, in the relevant period, being one year, there could be no refund application maintai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt vehemently urged that the issue arising in the present matter is squarely covered by the decision of Division Bench of this Court in the case of National Winder v. Commissioner of Central Excise, Allahabad [2003 (154) E.L.T. 350] in which it has been held that if duty is paid by a manufacturer under protest then limitation of six months will not apply to a claim of refund by a purchaser. For the reasons given hereinabove, we hold that the said judgment is per incuriam. At this stage, it is important to note that the Division Bench judgment [Hon'ble S.N. Variava and B.P. Singh, JJ.] in the case of National Winder (supra) was delivered on 11-3-2003. However, on 13-11-2003, the Division Bench [Hon'ble S.N. Variava and H.K. Sema, JJ.], has referred the matter as stated above to the Larger Bench in the light of conflict which the Division Bench noticed between the earlier judgments of this Court on one hand and Paragraph 104 of the judgment of the Constitution Bench of nine-Judges in the case of Mafatlal Industries Ltd. (supra). Hence, by this judgment, we have clarified the position in law. 25. Though the Learned Counsel for the petitioner has cited few decisions of the And....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the payment made was under protest. Protest made subsequently in any representation made to the department is not sufficient. 22. Learned Counsel for the appellant has pointed out that the appellant had sent a letter dated 13-9-2013 (Annexure-D) to the department claiming refund of the amount and the claim made therein was within the time prescribed by Section 11B(1) of the Act. It was only a letter and not an application for refund of the amount in the prescribed form. Section 11B(1) of the Act specifically stipulates that an application for refund of duty has to be made in such form and manner as may be prescribed. The letter sent by the appellant to the department cannot be treated as an application for refund of amount as envisaged under Section 11B(1) of the Act. 23. The only question now survives for consideration is whether the appellant can take advantage of the decision of the Supreme Court in Bhayana Builders (supra) to contend that the application for refund of amount filed by him in the prescribed form was within the time stipulated under Section 11B(1) of the Act. As noticed earlier, the issue whether value of the materials supplied by the servic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thority of law or without reference to any statutory authority or the specific provisions of the Act and the Rules framed thereunder have no application, the decision will be guided by the general law and the date of limitation would be the starting point when the mistake or the error comes to light. But in making claims for refund before the departmental authority, an assessee is bound within four corners of the statute and the period of limitation prescribed in the Central Excise Act and the Rules framed thereunder must be adhered to. The authorities functioning under the Act are bound by the provisions of the Act. If the proceedings are taken under the Act by the department, the provisions of limitation prescribed in the Act will prevail. It may, however, be open to the department to initiate proceedings in the Civil Court for recovery of the amount due to the department in case when such a remedy is open on the ground that the money received by the assessee was not in the nature of refund. This was the view taken by the Tribunal in a previous decision in the case of Miles India Ltd. v. Assistant Collector of Customs, [1987 (30) E.L.T. 641 (S.C.) - 1985 ECR 289 (1)], but it was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d refund is claimed was collected from or paid by him and the incidences of such duty had not been passed on by him to any other person. 7. What is crucial is that the appellants paid the claimed amount as service tax. They have approached the jurisdictional authority of service tax for refund of the said money. It is clear that the jurisdictional service tax authority is governed by the provisions of Section 11B as the claim has been filed as per the said mandate only. Here, we have specifically asked the Learned Counsel for the appellant under what provision of law he is seeking the return of the money earlier paid. He admitted that the claim has been preferred in terms of the provisions of Section 11B. If that being the case, it cannot be said that except for limitation other provisions of Section 11B will be made applicable to the appellant. The Learned Counsel also did not advance such proposition. He repeatedly submitted that the amount is paid mistakenly. The same is not a tax and should be returned without limitation as mentioned in Section 11B. We are not convinced by such submission. 8. Here it is relevant to note that in various cases the High Courts an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....L.T. 641 (S.C.). The Apex Court upheld the decision of the Tribunal to the effect that the jurisdictional customs authorities are right in disallowing the refund claim in terms of limitation provided under Section 27(1) of the Customs Act, 1962. We also note that in Assistant Collector of Customs v. Anam Electrical Manufacturing Co. - 1997 (90) E.L.T. 260 (S.C.) referred to in the decision of the Tribunal in XL Telecom Ltd. (supra), the Hon'ble Supreme Court held that the claim filed beyond the statutory time limit cannot be entertained. 9. The Apex Court in Mafatlal Industries Ltd. (supra) observed that the Central Excise Act and the Rules made thereunder including Section 11B too constitute "law" within the meaning of Article 265 and that in the face of the said provisions - which are exclusive in their nature no claim for refund is maintainable except and in accordance therewith. The Apex Court emphasized that "the provisions of the Central Excise Act also constitute "law" within the meaning of Article 265 and any collection or retention of tax in accordance or pursuant to the said provisions is collection or retention under "the authority of law" within the meaning of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is answered in favour of the Revenue, for its conclusion, subject to caveat set forth above with regard to its observation that the levy could be construed without authority of law but not unconstitutional. 13.1 In so far as, Question No. (ii) is concerned, it is answered against the assessee and in favour of the Revenue. 13.2 As regards, Question No. (iii), in which, there is a reference to the judgment of the Gujarat High Court in the matter of Binani Cement v. Union of India reported in 2013 (288) E.L.T. 193 (Guj.) - that judgment, in our opinion, would have no application to the instant case, as in that matter, the Gujarat High Court was dealing with a writ petition. Clearly, the Tribunal, in the instant case, was exercising powers, as a creature of the statute and therefore, could not have granted any relief to the appellant/assessee, having regard to the nature of its jurisdiction. Therefore, Question No. (iii), will also have to be answered against the assessee and in favour of the Revenue. 14. Therefore, while we are of the opinion that no relief can be granted to the appellant/assessee, in view of the jurisdiction that we are presently invested ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... no service tax is leviable in respect of Scientific and Technical Consultancy Services received from abroad by the appellant prior to 18-4-2006" and accordingly, he confirmed payment that was effected between 18-4-2006 and July 2006 as duly paid service tax under Reverse Charge Mechanism. Explanation of relevant date at 11B (ec) clearly indicates that if duty becomes refundable 'as a consequence of order/judgment', then the period of one year is to be calculated from the date of the order/judgment. Therefore, without prejudice to the submissions made for and against the issue, it can invariably lead a rational human being to a conclusion that there is no requirement of an express direction for refund of service tax paid that was not payable if as a consequence of judgment or decree such duty becomes refundable. The stipulation contained in Mafatlal Industries Ltd. judgment [1997 (89) E.L.T. 247 (S.C.)] that if duty is declared as illegal, unconstitutional in respect of any other person say in respect of 'Y' then 'X' cannot claim after passes of long years though he had fought a legal battle up to a certain stage and subsequently abandoned it (para-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tting aside the judgment of the Tribunal the Supreme Court directed a refund of the entire amount of Rs. 2 lakhs to the appellant with interest at the rate of 12%, since the demand has been quashed by the judgment of the Apex Court. On going through Paragraph 7 of the judgment, where this issue has been considered, we do not find any specific direction to pay interest on the amount of pre-deposit from the date of pre-deposit. We do not also find any consideration of the question whether in all cases where pre-deposit was made pursuant to Provisions contained in Section 35F of the Central Excise Act such amount is liable to be refunded with interest from the date of deposit once the appeal is disposed of in favour of the appellant. 4. As far as the other two decisions are concerned, namely, the decision of the Madras High Court [115 E.L.T. 302] and that of the Bombay High Court [82 E.L.T. 177] there is a specific consideration of this aspect and it has been held that the parties are entitled to refund of the predeposit amount with interest but only from the date of the Final Order of the Tribunal. This aspect has not been noted in the order of the Tribunal in (126) E.L.T. 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Tribunal. The entitlement for refund would arise only when the appeal was finally disposed of in favour of the appellant by the Tribunal. If that be so no interest can be claimed for the period prior to the date of Final Order. We, therefore, find that the decision of the South Zonal Bench in [126 E.L.T. 1225] is no authority for the applicant before us to claim interest on the amount of pre-deposit w.e.f. the dates of the pre-deposit. 8. We find that in this case the Revenue has already made refund of the pre-deposit amount in respect of the above mentioned appeals on 28-2-2001 and 21-9-2001. We hold that the applicants are not entitled to interest as prayed by them from dates of the pre-deposit. In the result the applications stand dismissed." This decision of tribunal has been affirmed by the Hon'ble Apex Court as reported at [2008 (224) ELT A133 9SC)]. 4.16 Considering the decision of Hon'ble Apex Court in the case of Kuil Fireworks, Hon'ble Gujarat High Court has in case of Padmanabh Silk Mills [2006 (193) E.L.T. 536 (Guj.)] observed as follows: "11. From the above, it is clear that u/s. 11B(2) of the Central Excise Act, 1944, on making an Application ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lowed the Appeal against the impugned order passed by CEGAT and there it had awarded interest. We fail to appreciate that how the Hon'ble Supreme Court Judgment in Kuil Fireworks (supra) will have any application. In our considered opinion the Larger Bench of the CEGAT, without properly applying itself, might have followed that Judgment and held that the department was bound to pay interest on the belated claim of refund u/s. 11BB of the Act. 14. This brings us to the Judgment of the learned Single Judge of MP High Court in the case of Hope Textiles Ltd. (supra). The learned single Judge, without considering the provisions of either Sections 11BB or 11B(2) of the Act straightway allowed the writ petition on the basis of the Hon'ble Supreme Court Judgment in the case of Elpro International Ltd. v. Joint Secretary, Government of India, reported in 1985 (19) E.L.T. 3 (S.C.), wherein the Hon'ble Supreme Court has held that........ "Since in the instant case, excise duty was wrongly collected in 1966 and the amount was refunded in May, 1977, therefore, it will neither be harsh nor unjust if an amount of Rs. 50,000/- is paid by the Union to the Respondent Company on acc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Court held that pre-deposit is refundable along with interest and for that purpose, relied on its decision in Commissioner of Central Excise, Hyderabad v. I.T.C. Ltd. (supra) and Central Board of Excise and Customs' Circular dated 8-12-2004. 33. In a recent judgment of Gujarat High Court in Hindustan Coca-Cola Beverages Pvt. Ltd. v. UOI - 2015 (324) E.L.T. 299 (Guj.), an argument was raised, if there is no provision for payment of interest, the same shall not be payable. Court in Paras 5.4 and 6 said as under :- "5.4 The contention to the effect that no interest is payable because there is no provision of interest under the scheme of the Act is also thoroughly misconceived and misplaced. When the Department acts illegally and not as per the scheme of the Act, the interest on such refund can never be provided for under the Scheme of the Act. If the authorities act as per the law, the question of granting interest on refund can be appreciated and considered as per the scheme of the Act. 6. Learned Senior Advocate for the petitioner cited various judgments in support of his contention that even in absence of any statutory provision, interest on refund is au....
X X X X Extracts X X X X
X X X X Extracts X X X X
....they have made construction and rendered services. In other words, if the respondent had not paid those amounts, the authority could not have demanded the petitioner to make such payment. In other words, authority lacked authority to leavey and collect such service tax. In case, the department were to demand such payments, petitioner could have challenged it as unconstitutional and without authority of law. If we look at the converse, we find mere payment of amount, would not authorize the department to regularize such payment. When once the department had no authority to demand service tax from the respondent because of its circular dated 17-9-2004, the payment made by the respondent company would not partake the character of "service tax" liable to be paid by them. Therefore, mere payment made by the respondent will neither validate the nature of payment nor the nature of transaction. In other words, mere payment of amount would not make it a "service tax" payable by them. When once there is lack of authority to demand "service tax" from the respondent company, the department lacks authority to levey and collect such amount. Therefore, it would go beyond their purview to collect ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 compensation for the same not an interest on interest. 8.Further it is brought to our notice that the Legislature by the Act No. 4 of 1988 (w.e.f. 1-4-1989) has inserted Section 244A to the Act which provides for interest on refunds under various contingencies. We clarify that it is only that interest provided for under the statute which may be claimed by an assessee from the Revenue and no other interest on such statutory interest." 4.19 Further in case of Willowood Chemicals Pvt. Ltd. [2022 (60) G.S.T.L. 3 (S.C.)] "18. Coming back to the present cases, the relevant provision has prescribed rate of interest at 6 per cent where the case for refund is governed by the principal provision of Section 56 of the CGST Act. As has been clarified by this Court in Modi Industries Ltd. and Godavari....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons aforenoted we find ourselves unable to endorse the observation appearing in Para 34 of the report where a deposit of duty and a pre deposit were considered to be identical concepts. As was noted hereinbefore, a pre-deposit made as a condition of filing an appeal is in any case not considered to be "duty" even by the respondents. 32. The decision of this Court in Team HR Services, had frowned upon the distinction sought to be advocated by the respondents there between a deposit made under protest and a pre-deposit made in connection with an appeal. As would be further evident from a reading of Paras 14 and 15 the counsel appearing for the respondents had also failed to draw the attention of the Court to any statutory provision which governed the issue of refund. The aforesaid decision is thus clearly distinguishable especially when undisputedly, in the present matters the issue of refund is governed by the provisions of Sections 11B and 11BB." 4.21 Supreme Court in Ranbaxy Laboratories Ltd. v. Union of India and Ors. [(2011) 10 SCC 292 = 2011 (273) E.L.T. 3 (SC) = 2012 (27) S.T.R. 193 (SC)] has held as follows: - "12. It is manifest from the afore extracted ....