TaxTMI 
TaxTMI 
2024 (11) TMI 1661
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.... Rs.1.5 Crore on 19.03.2015 and Rs.1.5 Crore on 30.03.2015). Later on, the enquiry was transferred to DGCEI who issued a demand cum show cause notice [SCN] dated 08.11.2016 proposing recovery of Cenvat Credit amounting to Rs. 25,53,00,660/- under Cenvat Credit Rules [CCR] 2002. During pendency of the SCN the Respondents applied for refund of Rs. 8,21,30,257/- on 26.02.2018. Out of Rs. 8,21,20,257, the amount of Rs.8,00,00,000/- was paid during investigation in the month of March, 2015 and Rs. 21,20,257/- was balance in PLA as on 30.06.2017. The refund application was rejected but in appeal the Ld. Commissioner (Appeals) allowed the refund alongwith interest to be paid from the date of its deposits vide the impugned Order-in-Appeal dated 28.06.2019. Aggrieved with the Order-in-Appeal dated 28.06.2019 the Revenue has filed Appeal No.70713/2019- EX[DB]. In the meantime, the Assistant Commissioner in compliance of the Commissioner (Appeals) order dated 28.06.2019 granted refund alongwith interest through Order-in- Original dated 28.08.2019. 3. In the meantime, the Respondents applied for SVLDRS Scheme w.r.t. the SCN F. No.52/INT/DGCEI/HQ/2015/12 dated 08.11.2016 by filing SVLDRS-1 o....
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....whether interest was correctly paid from the date of deposit or it should be governed by Section 11BB where interest is calculated after three months from the date of filing of refund application the Ld. Departmental Representative referred the case of Ranbaxy Laboratories Ltd. [2011 (273) E.L.T. 3 (S.C.)] whereby it was settled by the Hon'ble Supreme Court that interest on delayed prefund is payable under 11BB on expiry of three months from the date of receipt of application under Section 11B(1) of the CEA, 1944. On this, the Ld. Authorized Representative submitted that it is not applicable in their case because admittedly it was not covered under Section 11B of CEA, 1944. He contended that in case of revenue deposits interest has to be paid from the date of deposit. 3.4 In support of his contention, he relied on the following case laws :- (i) Kesar Enterprises Vs. Commissioner of CGST, Noida [2022 (380) E.L.T. 319 (Tri-Alld.)] (ii) LANVIN Synthetics Pvt. Ltd. Vs. Commissioner of Central Excise (Appeals) Mumbai-I [2020 (374) E.L.T. 759 (Tri-Mum.)] (iii) Duggar Fibre Pvt. Ltd. Vs. Commissioner of C. Ex, Customs and CGST, Delhi [2021 (378) E.L.T. 29....
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....d that unspent amount lying as balance in PLA is not a duty but an advance towards duty. It takes colour of duty only when it is utilized for payment of duty. Hence, provision of Section 11B of CEA, 1944 providing limitation period of one year is not applicable for refund of such unspent amount in PLA. In the instant case Rs.8,21,30,257.00 was refunded which was lying unspent in their PLA on 30.06.2017. Out of the said amount the amount of Rs.8,00,00,000/- was deposited in March, 2015 during investigation. This Tribunal in case of Parle Agro Pvt. Ltd. Vs. Commissioner, CGST Noida [2018 (360) E.L.T. 1005 (Tri-Alld.)] has held that amount deposited during pendency of investigation is a revenue deposit and provisions of Section 11B of the CEA, 1944 are not applicable in such cases. The operating part of the order is extracted below :- "6. Having considered the rival contentions, we find that as held by Hon'ble Punjab and Haryana High Court and as earlier held by this Tribunal the amounts, which are deposited during the pendency of investigation and proceedings, if the same are not adjudged as duty, fine or penalty then the amount that is not adjudged as duty, fine and pen....
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....fication 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. Explanation . - Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal, National Tax Tribunal or any court against an order of the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, under sub-section (2) of section 11B, the order passed by the Commissioner (Appeals), Appellate Tribunal, National Tax Tribunal or, as the case may be, by the court shall be deemed to be an order passed under the said sub-section (2) for the purposes of this section." 4.1 It is seen....
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.... New Delhi has granted interest @12% from the date of deposit. ⮚ The Tribunal, Regional Bench, Chandigarh in case of Shahi Exports Ltd. Vs. Commissioner of Central Excise and Service Tax, Gurgaon-I [2022 (58) G.S.T.L. 367 (Tri- Chan.)] has also granted interest on such deposits @12% p.a. from the date of deposit till its realization. ⮚ In case of Parsvnath Traders Vs. Principal Commissioner of CGST [2023 (77) G.S.T.L. 413 (P & H)] the Hon'ble High Court of Punjab & Haryana in a similar case in GST regime ordered refund of the amount paid during search alongwith interest from the date of deposit. ⮚ This Tribunal in case of Parle Agro Pvt. Ltd. Vs. Commissioner, CGST, Noida [2022 (380) E.L.T. 2019 (Tri- Alld.)] has granted interest on such revenue deposits @ 12% p.a. from the date of deposits upto the date of payment. 4.3 From facts on record and as discussed supra, it is obvious that the amount deposited by the Respondent has taken the Colour of "Revenue Deposit" and this Tribunal & Constitutional Courts in catena of orders have held that refund of such type of deposit attracts interest @12%. 5. In view of the above discussio....
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....2018 dated 04.06.2018 proposing to reject the refund claim filed by Respondents 7 13.06.2018 The Assistant Commissioner passed Order-in- Original No. 06/AC/REF/Preet rejecting the refund claim filed by Respondents 8 28.06.2018 Respondents preferred an Appeal No. 43-CE/APPL- MRT/GZB/2018-19 with the Commissioner (Appeals), Meerut against the said O-I-O dated 13.06.2018. 9 28.06.2019 The Commissioner (Appeals) vide Order-in-Appeal No. GZB/EXCUS/000/APPL-MRT/83/2019-20 Dated 28.06.2019 rejected the grounds taken by the Assistant Commissioner for rejection of refund and allowed the appeal of Respondents. He ordered for refund of the amount applied for along with applicable interest from the date of deposit till date of actual payment. 10 07.08.2019 The respondents requested the Assistant Commissioner, Div -IV Ghaziabad to allow the refund along with interest in compliance of O.I.A. dated 28.06.2019. 11 28.08.2019 The Assistant Commissioner vide his Order-in- Original No 24/AC/Refund/D-IV/GZB/2019-20 dated 28.08.2019 granted the refund of Rs. 8,21,30,257/ along with interest. 12 15.10.2....
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....c 11B of the Act WILL NOT APPLY TO THE REFUND OF SUCH DEPOSITS". On one hand, OIA rules out applicability of Section 11B to this refund application, on the other hand, it says the refund alongwith interest is to be given AS PER LAW. The OlA fails to mention under which law and under which provisions or sections, this refund is being allowed with interest. It is trite to say that Commissioner (A) and Tribunal are creations of the Central Excise Act and they therefore cannot venture outside the boundaries of the Act which created them. Therefore, by giving such findings and conclusions, it appears that the Commissioner (A) has created an unknown law with unknown provisions to give effect to this refund alongwith interest. 2.4 The OlA grants interest on refund from the date of deposit till the date of actual payment by citing decision of Madras High Court in Ucal Fuel where interest was given @ 6% per annum. Under their equity jurisdiction, High Courts are empowered to decide cases but that power is not available to Commr (A). Secondly, in this case, the balance in PLA account was never utilized by the party for payment of duty and therefore, the money was always of the party....
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....not considered the facts of the case, on statutory terms, and has arbitrarily discarded the grounds of appeal put forth by the Department in respect of Appeal filed against the subject Order-in-Original No. R- 24/AC/Refund/D-IV/GZB/2019-20 dated 28.08.2019 passed by the Assistant Commissioner, Central Goods and Service Tax, Division-IV, Ghaziabad and consequently have arbitrarily not considered, on statutory merits, the erroneousness of the subject Order-in-Original No. R- 24/AC/Refund/D-IV/GZB/2019-20 dated 28.08.2019 and simultaneously have arbitrarily not considered that the Department has filed an appeal against the said earlier Order-in-Appeal No. GZB/EXCUS/000/APPL-MRT/83/2019- 20 dated 28.06.2019 i.e. the i.e. the OIA on the basis of which the Assistant Commissioner, Central Goods and Service Tax, Division-IV, Ghaziabad had passed the subject Order-in-Original No. R-24/AC/Refund/D-IV/GZB/2019-20 dated 28.08.2019 whereby the subject refund has been wrongfully sanctioned to the said party alongwith interest. Thus, the Commissioner (Appeals) vides his subject Order has again arbitrarily failed to appreciate the facts of the case and has thereby wrongfully rejected the appeal fi....
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....Court judgment (Para 69) - Nothing argued or submitted regarding the same - Mafatlal's case held that any collection of tax under wrong notion/conception of law declared unconstitutional, becomes refundable - Present case is of suo motu deposit without any formal protest to get rid of apprehended adjudication - When deposit made under law, such deposit is appropriated against adjudication demand and if found unwarranted., law permits refund - Section 11B ibid". (ii) ESSAR Projects India Ltd. Vs CCE&ST Ahmedabad [2013 (298) E.L.T. 418 (Tri. - Ahmd.)] :: "Refund claim - Any deposit made during investigation or after adjudication has to be refunded to assessee when Order-in-Original is set aside and no quantification has been done by passing a suitable order- Section 11B of Central Excise Act, 1944." (iii) Mahindra Engg. & Chemical Products Ltd. Vs CCE, Pune-I [2019 (368) E.L.T. 84 (Tri .- Mumbai)] :: Pre-deposit vis-à-vis deposit made during investigation Amount deposited during investigation and pre-deposit made in terms of order of Appellate Authority/Court for purpose of hearing appeal, are different and cannot be treated at par. ....
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.... thereof may be given a liberal meaning if the same is directory in nature." 5. The Commissioner (Appeals) in upholding the Order- in-Original No. R- 24/AC/Refund/D-IV/GZB/2019-20 dated 28.08.2019 passed by the Assistant Commissioner, Central Goods and Service Tax, Division-IV, Ghaziabad and discarding the grounds of Appeal put forth by the Department in the appeals filed by the Department against the said Order-in-Original No. 24/AC/Refund/D- IV/GZB/2019-20 dated 28.08.2019 and against the said earlier Order-in-Appeal No. GZB/EXCUS/00/APPL- MRT/83/2019-20 dated 28.06.2019, has together with wrongfully upholding the sanctioning of the subject refund to the said party has simultaneously appeared to have erred in arbitrarily upholding the grant of interest to the said party. In the matter, as submitted herein above, as the subject refund of was not due to the said party on legal terms, supra, so the grant of interest thereon is statutorily ruled out. However, assuming without admitting that the refund claim would be admissible to the party, the Commissioner (Appeals)'s order to uphold the grant of interest in the subject case is arbitrary as it is without the sanction of....
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....d as follows: 4.3 Appellant has filed this appeal assailing the above order and have claimed the refund from the date of deposit and at rate of 12%. They have claimed the same on the basis of decision of Chandigarh bench in case of Riba Textiles Ltd [Final Order No 60115/2020 dated 17.01.2020] "6. On going through the decision cited by learned A.R. in the case of M/s Juhu Beach Resort Ltd (supra), I find that in the said case, the decision of Hon'ble Apex Court in the case of Sandvik Asia Ltd 3 Excise Appeal No. 60446 of 2018 vs. CIT, Pune - 2007 (8) STR 193 (SC) and the decision of Hon'ble High Court of Madras in the case of CCE, Chennai-II vs. UCAL Fuel Systems Ltd - 2014 (306) ELT 26 (Mad.) have not been considered. Therefore, the said decision cannot be relied upon. As in the case of M/s Marshall Foundry & Engg. Pvt. Ltd. (supra), this Tribunal has examined all said decisions and thereafter observed as under: "8. The said issue has been examined by this Tribunal in the case of Tribunal in the case M/s. Fujikawa Power and other vs. CCE, Chandigarh-I vide Final Order No. 61041- 61042/2019 dt.26.11.2019 wherein this Tribunal has observed as under....
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...., the interest on delayed refund is payable after expiry of 3 months from the date of granting refund or from the date of communication of order of the appellate authority, which are parimateria. Therefore, the decision of Hon'ble Apex Court in the case of Sandvik Asia Ltd. (supra) is law of land, in terms of Article 14 of the Constitution of India which is to be followed by me, wherein the Hon'ble Apex has observed as under :- "45. The facts and the law referred to in paragraph (supra) would clearly go to show that the appellant was undisputably entitled to interest under Sections 214 and 244 of the Act as held by the various High Courts and also of this Court. In the instant case, the appellant's money had been unjustifiably withheld by the Department for 17 years without any rhyme or reason. The interest was paid only at the instance and the intervention of this Court in Civil Appeal No. 1887 of 1992 dated 30.04.1997. Interest on delayed payment of refund was not paid to the appellant on 27.03.1981 and 30.04.1986 due to the erroneous view that had been taken by the officials of the respondents. Interest on refund was granted to the appellant after a substantial laps....
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....ue otherwise conferred; a recompense in value; a recompense given for a thing received recompense for the whole injury suffered; 6 Excise Appeal No. 60446 of 2018 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 injury directly and proximately caused by a breach of contract or duty; remuneration or wages given to an employee or officer." 47. There cannot be any doubt that the award of interest on the refunded amount is as per the statute provisions of law as it then stood and on the peculiar facts and circumstances of each case. When a specific provision has been made under the statute, such provision has to govern the field. Therefore, the Court has to take all relevant factors into consideration while awarding the rate of interest on the compensation. 48. This is the fit and proper case in which action should be initiated against all the officers concerned who were all in charge of this case at the appropriate and relevant point of time and because of whose inaction the appellant was made to suffer both financiall....
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....ny High Court taking contrary view, will be no longer good law. The 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. I have also come across the judgment of the Calcutta High Court in Madura Coats Pvt. Ltd. v. Commissioner of C. Ex., Kolkata-IV [2012 (285) E.L.T. 188 (Cal.), wherein the peremptory directions of the Apex Court in the judgment of ITC Ltd. (supra) was considered and ordered 12% interest, and further held that when the High Court directed the respondents to pay interest to the appellant in terms of the circular dated 8-12-2004 on the pre-deposit of the delayed refund within two months, it has to be construed that, the Court meant the rate of interest which was awarded by the Supreme Court in the case of Commissioner of Central Excise v. ITC Ltd., which was the rate quantified by the Supreme Court in the absence of any statutory provisions in the Act in question. Even though various other judgments of various High Courts and the various Tribunals was ....
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....ifferential interest amount and make the payment to the appellants." 21. As the provisions of section 243 Income Tax Act, 1961 and section 35FF of Central Excise Act, 1944, are parimateria. Therefore, following the decision of Hon'ble Apex Court in the case of Sandvik Asia Ltd. (supra) and Sony Pictures Networks India Pvt.Ltd. (supra) I hold that the appellants are entitled to claim interest from the date of payment of initial amount till the date its refund @ 12% per annum." 7. As this Tribunal has examined the issue in details in the case of M/s Marshall Foundry & Engg. Pvt. Ltd. (supra), therefore, I hold that the appellant is entitled to claim the interest on delay refund from the date of deposit till its realization." 4.4 Further decisions in following decisions have been brought to my knowledge where in following has been observed: A. Parle Agro Pvt Ltd. [2022 (380) ELT 219 (T- ALL)] "28. Section 11B of the Excise Act deals with claim for refund of duty and interest, if any, paid on such duty. It provides that any person claiming refund of any duty of excise and interest may make an application for such refund of duty and interest.....
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.... annum for the purpose of the said section. 2. This notification shall come into force from the 1st day of April, 2016. 36. The Notification issued under Section 11BB provides interest at the rate of six per cent per annum. It is reproduced below : Notification No. 67/2003-C.E. (N.T.), dated 12-9- 2003 Notification Under Section 11BB Interest @ 6% per annum on delayed refunds. - In exercise of the powers conferred by section 11BB of the Central Excise Act, 1944 (1 of 1944) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 17/2002-Central Excise (N.T.), dated the 13th May, 2002 [GSR 353(E), dated the 13th May, 2002], except as respect things done or omitted to be done before such supersession, the Central Government hereby fixes the rate of interest at six per cent per annum for the purpose of the said section. 37. The Notification issued under Section 11DD provides interest @ of 15% per annum on the amount collected in excess of duty. It is reproduced below : M.F. (D.R.) Notification No. 68/2003-C.E. (N.T.), dated 12-9-2003 Notification Und....
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....d 36%. No concept of any time-limit is being mentioned in the said provision. Hon'ble Apex Court also has settled this issue in the case of Sandvik Asia Ltd. reported as 2006 (196) E.L.T. 257 (S.C.) holding the assessee entitled for interest along with the refund of the amount which he was not liable to pay to the Department. 8. I also endorse the following findings of the Tribunal in the case of M/s. Parle Agro Pvt. Ltd. reported as 2021- TIOL-306-CESTAT-ALL = 2022 (380) E.L.T. 219 (Tri. - All.) as under : "30. ..... 31. Section 11D of the Excise Act deals with duties of excise collected from the buyer to be deposited with Central Government. It provides that every person who is liable to pay duty and has collected any amount in excess of the duty assessed from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. 32. Section 11DD of the Excise Act deals with interest on the amount collected in excess of the duty. It provides that where an amount has been collected in excess of the duty from the buyer of such goods, the person who is liable t....
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....the petitions it was submitted that inaction leading to inordinate delay in granting refunds was per se arbitrary and that the inordinate delay impacted the working capacity of the Writ Petitioners thereby reducing their ability to conduct business and as such appropriate compensation ought to be awarded along with interest for delay. The submissions were opposed by the Learned Counsel appearing for the Revenue. 6. The High Court considered the rival submissions in light of the statutory provisions and relied upon certain decisions including the decision of this Court in K.T. Plantation Pvt. Ltd. and Anr. v. State of Karnataka [(2011) 9 SCC 1], Sandvik Asia Ltd. v. Commissioner of Income Tax-I, Pune and Others [(2006) 2 SCC 508 = 2007 (8) S.T.R. 193 (S.C.) = 2006 (196) E.L.T. 257 (S.C.)] and Commissioner of Income Tax, Gujarat v. Gujarat Fluoro Chemicals [(2014) 1 SCC 126 = 2017 (51) S.T.R. 236 (S.C.) = 2013 (296) E.L.T. 433 (S.C.)]. In its judgment dated 10-7-2019 which is under challenge in the second case, the High Court concluded : "22. The position of law appears to be well settled. The provisions relating to an interest of delated payment of refund ....
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....f receipt of the writ of this order." 8. The appellant being aggrieved, preferred Review Petitions in both the cases. It was submitted inter alia : "4. It is respectfully submitted that this Hon'ble Court has directed the respondent authority to pay simple interest on the delayed payment at the rate of 9% per annum from the date of filing of the GSTR-3B. 5. It is respectfully submitted that as per section 56 of the IGST Net Interest at the rate of not exceeding six percent may be given whereas by order dated 10-7-2011 this Hon'ble Court was pleased to give interest at the rate of 9%." By separate orders dated 13-3-2020 passed in both the cases, the Review Petitions preferred by the appellant were dismissed. 9. The aforestated judgments and orders passed by the High Court are under challenge in these appeals. The appellants do not dispute the eligibility of the respondents for receiving interest for delayed payment of claims but their submission is that in terms of the relevant statutory provision, the interest could be awarded at the rate of 6 per cent and not 9 per cent per annum. Considering the stand taken by the appellants, a....
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....sdiction in proper circumstances to order the consequential relief for the refund of the tax illegally realised. We do not find any good reason to extend this principle and, therefore, hold that no petition for the issue of a writ of mandamus will be normally entertained for the purpose of merely ordering a refund of money to the return of which the petitioner claims a right." 7. The Court has emphasised that there was no legal right in the appellant who had filed the writ petition to claim the refund under the relevant statute. 8. In the present case also till the insertion of Section 27A in the Act by Act 22 of 1995 there was no right entitling payment of interest on delayed refund under the Act. Such a right was conferred for the first time by the said provision. Act 22 of 1995 also inserted Section 28AA which provides for payment of interest on delayed payment of duty by a person who is liable to pay the duty. Thus at the relevant time there was no statutory right entitling the respondents to payment of interest on delayed refund and the writ petition filed by them was not for the enforcement of a legal right available to them under any statute. The claim for ....
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.... : (i) Normally, a petition under Article 226 of the Constitution of India will not be entertained to enforce a civil liability arising out of a breach of a contract or a tort to pay an amount of money due to the claimants. The aggrieved party will have to agitate the question in a civil suit. But an order for payment of money may be made in a writ proceeding, in enforcement of statutory functions of the State or its officers. (Vide Burmah Construction Co. v. State of Orissa [AIR 1962 SC 1320 : 1962 Supp (1) SCR 242]). (ii) If a right has been infringed - whether a fundamental right or a statutory right - and the aggrieved party comes to the Court for enforcement of the right, it will not be giving complete relief if the Court merely declares the existence of such right or the fact that existing right has been infringed. The High Court, while enforcing fundamental or statutory rights, has the power to give consequential relief by ordering payment of money realised by the Government without the authority of law. (Vide State of M.P. v. Bhailal Bhai [AIR 1964 SC 1006]). (iii) A petition for issue of writ of mandamus will not normally be entertained for the p....
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....ore of the view that reliance upon Suganmal was misplaced to hold that the writ petition filed by the appellant was not maintainable." 16. We, therefore, proceed to consider the merits. Turning to the basic question it must be noted that in the following cases, this Court dealt with the question as to payment of interest on the amount due by way of refund : (A) In Modi Industries Ltd. and Another v. Commissioner of Income Tax and Another [(1995) 6 SCC 396] a Bench of three Judges of this Court was called upon to consider the effect of Section 214 of the Income- tax Act, 1961, and the questions which arose were set out as under : "We shall now indicate how the controversy relating to the meaning of the expression "regular assessment" arises: an assessee pays advance tax according to his estimate of his income during the financial year relevant to the particular assessment year. He then files a return and an assessment is made under Section 143. It is found that he has paid more amount by way of advance tax than the amount of tax assessed. He will be refunded the extra amount with interest calculated from the first day of April of that assessment year to th....
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....rsuant to the assessment order to the date of the appellate order. Therefore, interpretation of Section 214 or any other section of the Act should not be made on the assumption that interest has to be paid whenever an amount which has been retained by the tax authority in exercise of statutory power becomes refundable as a result of any subsequent proceeding. (Emphasis supplied) (B) In Godavari Sugar Mills Ltd., a Bench of two Judges of this Court considered the question whether interest on the compensation amount at the rate of 9 per cent per annum could be awarded when the terms of Section 6 of the Maharashtra Agriculture Lands (Ceiling of Holdings) Act, 1961 prescribed payment of interest only at the rate of 3 per cent per annum. The discussion on the point was : "9. There is considerable force in the submissions of Ms. Madhavi Divan, the Learned Counsel for the respondents that the decisions of the Bombay High Court in Krishnakumar [W.P. No. 83 of 1986, decided on 29-6- 1991 (Bom.)] and Changdeo [ W.P. No. 3805 of 2000, decided on 7-7-2000 (Bom.)] are not sound, as they completely ignore Section 26 of the Act, while awarding interest at 9% per annu....
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.... 200; Rs. 500; Rs. 1000; Rs. 5000 and Rs. 10,000; and (b) of two classes - one being repayable during a period of twenty years from the date of issue by equated annual instalment of principal and interest, and the other being redeemable at par at the end of a period of twenty years from the date of issue. It shall be at the option of the person receiving compensation to choose payment in one or other class of bonds, or partly in one class and partly in another. (3) Where the amount of compensation or any part thereof, cannot be paid in the aforesaid denomination, it may be paid in cash." (Emphasis supplied) The said section contemplates the payment of compensation with interest at 3% per annum in annual instalments spread over a period of 20 years or at the end of 20 years. It also contemplates payment being made either by transferable bonds or in cash. Sub-section (3) of Section 26 enabling payment of compensation by cash, in cases where it could not be paid by such bonds, does not disturb the rate of interest, which is 3% per annum for 20 years, provided in sub-section (1) thereof. We are therefore of the view that whether the payment is made b....
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....andvik Asia Ltd. v. CIT, (2006) 2 SCC 508]. The only issue formulated by this Court for its consideration and decision was whether an assessee is entitled to be compensated by the Income Tax Department for the delay in paying interest on the refunded amount admittedly due to the assessee. This Court in the facts of the said case had noticed that there was delay of various periods, ranging from 12 to 17 years, in such payment by the Revenue. This Court had further referred to the several decisions which were brought to its notice and also referred to the relevant provisions of the Act which provide for refunds to be made by the Revenue when a superior forum directs refund of certain amounts to an assessee while disposing of an appeal, revision, etc. Since there was an inordinate delay on the part of the Revenue in refunding the amount due to the assessee this Court had thought it fit that the assessee should be properly and adequately compensated and therefore in para 51 of the judgment, the Court while compensating the assessee had directed the Revenue to pay a compensation by way of interest for two periods, namely, for Assessment Years 1977-1978, 1978-1979, 1981-1982, 1982-1983 i....
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....the Land Reforms Act and the Notification dated 8-3-1994 are valid, and there is no excessive delegation of legislative power on the State Government. (b) Non-laying of the Notification dated 8-3-1994 under Section 140 of the Land Reforms Act before the State Legislature is a curable defect and it will not affect the validity of the notification or action taken thereunder. (c) The Acquisition Act is protected by Article 31A of the Constitution after having obtained the assent of the President and hence immune from challenge under Article 14 or 19 of the Constitution. (d) There is no repugnancy between the provisions of the Land Acquisition Act, 1894 and the Rocrich and Devika Rani Rocrich Estate (Acquisition & Transfer) Act, 1996 (in short "the Acquisition Act"), and hence no assent of the President is warranted under Article 254(2) of the Constitution. (e) Public purpose is a precondition for deprivation of a person from his property under Article 300A and the right to claim compensation is also inbuilt in that article and when a person is deprived of his property the State has to justify both the grounds which may depend on scheme of the statut....
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.... in the instant case was in the region of 94 to 290 days and not so inordinate as was the case in Sandvik Asia Ltd., the matter has to be seen purely in the light of the concerned statutory provisions. In terms of the principal part of Section 56 of the CGST Act, the interest would be awarded at the rate of 6 per cent. The award of interest at 9 per cent would be attracted only if the matter was covered by the proviso to the said Section 56. The High Court was in error in awarding interest at the rate exceeding 6 per cent in the instant matters." 4.5 In the present case impugned order clearly observes that the amount that was deposited by the appellant at the time of visit of officers to their premises was appropriated by the original authority while adjudicating the case of shortages against the appellant. The amount so appropriated acquired the character of duty, the moment it is appropriated against the demand made. In case of Mafatlal Industries [1997 (89) ELT 247 (SC)], Hon'ble Supreme Court has observed as follows: "68. Re. : (I) : Hereinbefore, we have referred to the provisions relating to refund obtaining from time to time under the Central Excises an....
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....iabilities and all other incidental and ancillary matters, as will be pointed out presently. This is a bar upon a bar - an aspect emphasised in Para 14, and has to be respected so long as it stands. The validity of these provisions has never been seriously doubted. Even though in certain writ petitions now before us, validity of the 1991 (Amendment) Act including the amended Section 11B is questioned, no specific reasons have been assigned why a provision of the nature of sub-section (3) of Section 11B (amended) is unconstitutional. Applying the propositions enunciated by a seven-Judge Bench of this Court in Kamala Mills, it must be held that Section 11B [both before and after amendment] is valid and constitutional. In Kamala Mills, this Court upheld the constitutional validity of Section 20 of the Bombay Sales Tax Act (set out hereinbefore) on the ground that the Bombay Act contained 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 i....
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....und, whatever be the proceedings and whichever be the forum. Section 11B/Section 27 are constitutionally valid, as explained by us hereinbefore. They have to be applied and followed implicitly wherever they are applicable. 99. The discussion in the judgment yields the following propositions. We may forewarn that these propositions are set out merely for the sake of convenient reference and are not supposed to be exhaustive. In case of any doubt or ambiguity in these propositions, reference must be had to the discussion and propositions in the body of the judgment. (i) Where a refund of tax/duty is claimed on the ground that it has been collected from the petitioner/plaintiff - whether before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter - by mis-interpreting or mis-applying the provisions of the Central Excises and Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Act or by mis-interpreting or mis-applying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the pro....
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....is reproduced below: 11B. Claim for refund of duty and interest, if any, paid on such duty .- (1) Any person claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise ]] before the expiry of two years from the relevant datein such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in Section 12-A) as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person: Provided ... Provided further that the limitation of two years shall not apply where any duty and interest, if any, paid on such duty has been paid under protest. (2) If, on receipt of any such application, the Assistant Commissioner of Ce....
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.... Engineering Works [Order dated 14.07.2023 in WP (C) 4332/2022] observed as follows: "3. For the sake of brevity, the Court deems it apposite to notice the facts as they obtain in the writ petition filed by M/s Goldy Engineering Works vs. Commissioner of Central Excise & Anr.3 On 27 July 2006, a Show Cause Notice4 is stated to have been issued to the petitioner, its proprietor, one M/S Aay Kay Engineering Works and its proprietor, in respect of certain goods which had been seized. The aforesaid SCN was followed by another SCN dated 29 January 2007 in terms of which the Department raised a demand for additional duty as well as proposing penal action again against the noticees for having violated the provisions of an exemption notification. The petitioner asserts that during the pendency of those proceedings, it was also forced to deposit an amount of Rs. 20,00,000. The SCNs were ultimately finalized in terms of the order in original dated 08 February 2008. 4. In terms of the aforesaid order, the Additional Commissioner confirmed the duty demand of Rs. 45,31,574 /- under Section 11A of the 1944 Act and held the petitioners liable to pay the same along with interest ....
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....or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of Central Excise lower in rank than the [Principal Commissioner of Central Excise or Commissioner of Central Excise]; (ii) against the decision or order referred to in clause (a) of subsection (1) of Section 35-B, unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against; (iii) against the decision or order referred to in clause (b) of subsection (1) of Section 35-B, unless the appellant has deposited ten per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against: Provided that the amount required to be deposited under this section shall not exceed Rupees Ten crores: Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No. 2) Act, 20....
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....sed. 25. We further note that the subject of interest on delayed refund which is governed by Section 11BB itself prescribes the starting point for payment of interest on delayed refunds to be the date when an application under Section 11B(1) is received. On a conjoint reading of Sections 11B and 11BB of the 1944 Act, therefore, we come to the irresistible conclusion that interest on delayed refund is clearly dependent upon the making of a formal application as stipulated by Section 11B of the 1944 Act. 26. We also find merit in the contention canvassed by Ms. Narain who had submitted that a refund of duty and interest paid thereon is liable to be viewed as distinct from a pre-deposit that may be made in compliance with Section 35F of the 1944 Act. The Circular of the Board too strikes an identical position when it is stated that a deposit which is made in compliance with a statutory pre- condition for the preferment of an appeal cannot be viewed as "duty". It is the aforesaid aspect which appears to have weighed with the Board in proceeding to formulate its directive for refunds being effected immediately upon an appeal coming to be decided in favour of the assess....
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....estion which stands raised in these matters is the date from which that interest would flow. In Shri Jagdamba Polymers, the High Court on facts had found that the refund was inordinately delayed even though a claim for the same had been promptly lodged. This is clearly evident from Para 7 of the report. The said decision is thus clearly not an authority for the proposition that a refund must automatically follow de hors the requirements of Sections 11B and 11BB. 31. In eBIZ, the Allahabad High Court was not dealing with a claim for refund of "duty" but an amount deposited in the course of investigation. The High Court further went on to hold that even in the absence of a statutory provision if it be found that tax or duty had been wrongly collected, it would be liable to be refunded. There cannot be a dispute with regard to the aforenoted general proposition. What we seek to emphasize here is that in the present case, the issue of refund is duly regulated by two statutory provisions whose prescriptions would necessarily have to be adhered to. However, for reasons aforenoted we find ourselves unable to endorse the observation appearing in Para 34 of the report where a depos....
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....as drawn attention to : (A) Sandvik Asia Ltd. v. Commissioner of Income Tax-I, Pune, (2006) 2 SCC 508 = 2006 (196) E.L.T. 257 (S.C.) where interest @ 9% per annum was awarded; 'B) Surinder Singh v. Union of India, 2006 SCC OnLine Del 1863 (DB) = 2006 (204) E.L.T. 534 (Del.) where interest @ 12% per annum was granted on delayed refund; (C) Hello Minerals Water (P) Ltd. v. Union of India, 2004 SCC OnLine All 2187 (DB) = 2004 (174) E.L.T. 422 (All.) where interest @ 10% per annum was granted; (D) Hindustan Coca-Cola Beverages Pvt. Ltd. v. Union of India, 2013 SCC OnLine Guj 1487 (DB) = 2015 (324) E.L.T. 299 (Guj.) where interest @ 9% per annum and future interest @ 6% per annum was granted; and, (E) Ebiz.com Pvt. Ltd. v. Commissioner of Central Excise, Customs & S.T., 2017 (49) S.T.R. 389 (All.) where costs of Rs. 50,000/- were imposed on the Department. 20. In the present case, as aforesaid, the amount of Rs. 2,38,00,000/- was deposited by the petitioner of its own volition, during the audit/investigation, though under protest and the petitioner has not chosen to detail the circumstances in which the petitioner felt compelled ....
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....entral Excise Act, 1944. 3.5 Mumbai Bench of this Tribunal have taken similar view in the case of M/s Guardian Castings Pvt. Ltd. Final Order No.A/85519/2022 dated 13.04.2022 as follows :- "3.2 The Commissioner (Appeals) while disallowing the appeal filed by the appellant observed as under :- "8. In a similar case of Bharat Heavy Electricals Ltd. (BHEL) Vs. Commissioner of Central Excise, Meerut reported in 2002 (139) E.LT. 591 (Tri .- Del), Honorable Tribunal of Delhi held that - 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. The Honorable Delhi Tribunal, in the case of BHEL (supra), was considering whether interest is applicable from the date of deposit made in respect of mandatory pre-deposit under section 35F of Central Excise Act or otherwise. In the present case also the amount paid by appellant prior to finality of the case is akin to deposit. As mentioned above, Honorable Delhi Tribunal has held that such deposit can be refunded only after final disposal in favour of....
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....y the provisions of Section 35 FF as it stood before the commencement of the said Act." 8. It is not in dispute that the amount towards pre-deposit under section 35F of the Excise Act was deposited by the appellant on 30.08.2012, which date is prior to 06.08.2014 on which date section 35FF of the Excise Act was amended. The proviso to section 35FF of the Excise Act, as it stood after amendment on 06.08.2014, clearly stipulates that the amount deposited under section 35F of the Excise Act prior to 06.08.2014 shall continue to be governed by the provisions of section 35FF of the Excise Act as it stood before 06.08.2014. Thus, the appellant would not be entitled to claim interest on the pre-deposit amount as the provisions of section 35FF of the Excise Act, as it stood prior to its amendment on 06.08.2014, would be applicable. This is for the reason that section 35FF of the Excise Act, as it existed prior to 06.08.2014, provided that where the amount deposited towards pre-deposit under section 35F of the Excise Act is required to be refunded consequent upon the order of the appellate authority and such amount is not refunded within three months from the date of communication ....
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....d by any Authority is liable to be refunded within a period of three months from the date, the order is set aside by the Appellate Authority and in case, it is not so refunded within three months of the communication of the appellate order, interest at the specified rate shall be payable on it for the delayed period after three months. The aforesaid provision of Section 35FF of the Act was amended by the Finance Act No. 25 of 2014 with effect from 06.08.2014 and it was provided that where any amount deposited by the party under Section 35F of the Act is required to be refunded consequent upon the order of the Appellate Authority, it will carry an interest at the specified rate till the date of refund. It permits payment of interest at the specified rate for the entire period, the amount remains deposited with the authority. However, the aforesaid provision has been subjected to a proviso, which lays down that if any amount has been deposited prior to the enforcement of the Finance Act No. 25 of 2014 i.e. before 06.08.2014, it shall continue to be governed by the unamended provision of Section 35FF of the Act, which means that in cases of deposit made prior to 06.0....
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....to the appellant in this case. The impugned order is correct and calls for no interference. Accordingly, the appeal is rejected and the impugned order is upheld." 13. Learned counsel for the appellant, however, placed reliance upon a decision of a learned Member of the Tribunal in J.K. Cement Works. In this case the pre-deposit was made on 31.03.2006 but the appellant succeeded before the High Court on 25.01.2018. While claiming refund of the pre-deposit amount, the contention that was advanced was that the appellant would also be entitled to interest under the amended provisions of section 35FF of the Excise Act. The learned Member allowed payment of interest, even though the amount was refunded within three months from the date of communication of the order following the decision of the Supreme Court in Sandvik Asia Ltd. This judgment of the Supreme Court does not deal with the issue in hand. The main issue that arose before the Supreme Court was whether an assessee is entitled to be compensated by the Income Tax department for the delay in paying to the assessee the amount admittedly due. The delay in the matters before the Supreme Court were for various periods ranging....
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....347/- and 03.07.1997 for Rs.28.49.7621- 3.2. Further, while placing reliance on the judgements in the case of M/s Ranbaxy Laboratories Ltd. M/s Surajbhan Synthetics (P) Ltd), the learned appellate authority has held contrary to the ratio of the said rulings as, it was held in these cases that, the interest on delayed refund is payable on expiry of three months from the date of receipt of application under section 11(B)(1) of the C.Ex. Act, 1944. Therefore, the learned Commr (Appeals) conclusion have traversed beyond the mandate of the ruling of Hon'ble Supreme Court which is the law of land. 3.1 ......... 3.2 Arguing for the Revenue, learned AR submits that the interest in the present case needs to be paid after three months from the date of filing the refund application and not from the date of deposit of duty. He relied on the decision in the case of Ranbaxy Laboratories Ltd. and Surajbhan Synthetics (P) Ltd. 3.3 Arguing for the respondent, learned C.A. relied upon the following decisions in support of the impugned order :- ● Ucal Fuel Systems Ltd. [2014 (306) ELT 26 (Mad.)] ● Sandvik Asia Ltd. [2006 (196) ELT ....
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.... (27) STR 193 (SC)] held as follows :- "9. It is manifest from the afore-extracted provisions that Section 11BB of the Act comes into play only after an order for refund has been made under Section 11B of the Act. Section 11BB of the Act lays down that in case any duty paid is found refundable and if the duty is not refunded within a period of three months from the date of receipt of the application to be submitted under sub-section (1) of Section 11B of the Act, then the applicant shall be paid interest at such rate, as may be fixed by the Central Government, on expiry of a period of three months from the date of receipt of the application. The Explanation appearing below Proviso to Section 11BB introduces a deeming fiction that where the order for refund of duty is not made by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise but by an Appellate Authority or the Court, then for the purpose of this Section the order made by such higher Appellate Authority or by the Court shall be deemed to be an order made under sub-section (2) of Section 11B of the Act. It is clear that the Explanation has nothing to do with the postponement of the dat....
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....shall be paid to the applicant at the notified rate. Board has been receiving a large number of representations from claimants to say that interest due to them on sanction of refund/rebate claims beyond a period of three months has not been granted by Central Excise formations. On perusal of the reports received from field formations on such representations, it has been observed that in majority of the cases, no reason is cited. Wherever reasons are given, these are found to be very vague and unconvincing. In one case of consequential refund, the jurisdictional Central Excise officers had taken the view that since the Tribunal had in its order not directed for payment of interest, no interest needs to be paid. 2. In this connection. Board would like to stress that the provisions of section 11BB of Central Excise Act, 1944 are attracted automatically for any refund sanctioned beyond a period of three months. The jurisdictional Central Excise Officers are not required to wait for instructions from any superior officers or to look for instructions in the orders of higher appellate authority for grant of interest. Simultaneously, Board would like to draw attention to Circular ....
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.... the starting point of liability to pay interest, notwithstanding the date on which decision has been rendered by the competent authority as to whether the amount is to be transferred to Welfare Fund or to be paid to the applicant needs no interference." The special leave petition is dismissed. No costs." 14. At this stage, reference may be made to the decision of this Court in Shreeji Colour Chem Industries (supra), relied upon by the Delhi High Court. It is evident from a bare reading of the decision that insofar as the reckoning of the period for the purpose of payment of interest under Section 11BB of the Act is concerned, emphasis has been laid on the date of receipt of application for refund. In that case, having noted that application by the assessee requesting for refund, was filed before the Assistant Commissioner on 12th January 2004, the Court directed payment of Statutory interest under the said Section from 12th April 2004 i.e. after the expiry of a period of three months from the date of receipt of the application. Thus, the said decision is of no avail to the revenue. 15. In view of the above analysis, our answer to the question formulated ....
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....(a) in any case where the total income of the assessee does not consist solely of income from interest on securities or dividend, within three months from the end of the month in which the total income is determined under this Act, and (b) in any other case, within three months from the end of the month in which the claim for refund is made under this Chapter, the Central Government shall pay the assessee simple interest at (twelve) per cent per annum on the amount directed to be refunded from the date immediately following the expiry of the period of three months aforesaid to the date of the order granting the refund. Explanation : If the delay in granting the refund within the period of three months aforesaid is attributable to the assessee, whether wholly or in part, the period of the delay attributable to him shall be excluded from the period for which interest is payable. (2) Where any question arises as to the period to be excluded for the purposes of calculation of interest under the provisions of this section, such question shall be determined by the Commissioner whose decision shall be final. 244. Interest on refund where no claim is nee....
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....se Act, we do not find that these sections are in pari materia. Accordingly the reliance placed by the counsel on the above referred decision of Hon'ble Supreme Court would not be proper. 4.8 Respondent has relied upon various other decisions which do not help the cause of the respondent for the reason that these decisions do not take note of the decision of Hon'ble Supreme Court in the case of Ranbaxy Laboratories Ltd. 4.9 Further the amounts deposited by the respondent in the present case are not in nature of deposits made during investigation but is a duty paid by the respondent under protest. Duty paid under protest is for all the legal purposes and the amount deposited as duty though payment of the same is protested." 3.7 Respondent has relied upon the decision of Mumbai Bench in case of Lavin Synthetics [2020 (374) 759 (T-Mum)] (I was part of the bench). However the view taken in that case cannot be applicable to the present case because the same was in respect of a custom matter wherein there is no provision of deposit in PLA. Evidently in the present case it is the submission of the respondent that they are seeking the refund of amount deposited....