2018 (8) TMI 539 - AT - Central Excise

Entitlement of Interest on delayed refund - relevant date for calculation of Interest - whether the appellant is entitled for interest on refund of amount of duty paid during the investigation of the case from the date of deposit or after 3 month from the date of filling appeal in the event when the demand was dropped by the Tribunal order? - Held that - As regard, the deposit made during the investigation it is obvious that there is no provision in Central Excise or to make a deposit. Whatever payment made it is towards the probable Excise duty liability for which the investigation is undergoing, therefore, it cannot be said that any deposit made during the investigation so made by the assessee is not a duty but only a deposit - Once the adjudication authority confirms the demand the said amount stands confirmed as duty only, the same being the duty stands appropriate against the demand confirmed in the adjudication order. For this reason also the amount even though that paid during the investigation, shall be considered as payment of duty. The refund of such duty amount is clearly governed by the Section 11B, of Central Excise Act, 1944 - In case of refund under Section 11B provision, of interest is available Under Section 11BB. In terms of such section, of interest is payable only from the date after completion of 3 months from the date of filling the refund application - Therefore, the interest in any case is not payable from the date of deposit of the amount during the investigation. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
Whether the appellant is entitled to interest on the refund of duty paid during an investigation from the date of deposit or after 3 months from the date of filing the appeal.

Analysis:
The issue in this case revolves around the entitlement of the appellant to interest on the refund of duty paid during an investigation. The appellant argued that the amount paid during the investigation was a deposit and not towards duty, thus not governed under Section 11B. They contended that interest should be paid from the date of deposit, relying on a previous Tribunal decision. On the other hand, the Revenue argued that the amount paid was towards duty, falling under Section 11B, and interest should be paid from 3 months after the refund claim filing. The Revenue cited several judgments to support their stance.

The Tribunal carefully considered the submissions and records. It was noted that the key issue was whether interest on the refund of the amount paid during the investigation should be payable from the date of deposit or after 3 months of refund application filing. The Tribunal emphasized that any payment made during an investigation is towards the probable duty liability, making it a duty payment once confirmed by the adjudication authority. Therefore, such payments are considered duties and governed by Section 11B, with interest payable under Section 11BB from 3 months after the refund application filing.

The Tribunal referred to a Supreme Court judgment stating that interest on refund under Section 11B is payable from 3 months after the refund application date. The Tribunal distinguished a previous Tribunal decision cited by the appellant, as it did not consider various relevant judgments. Consequently, the Tribunal upheld the impugned order, dismissing the appeal.