2020 (7) TMI 290 - AT - Central Excise

Implementation of order regarding Grant of interest on delayed refund - HELD THAT - The order of rejection of interest passed by the Mr. Shubh Agarwal, Assistant Commissioner, amounts to interference in the process of justice delivery system. Mr. Shubh Agarwal was bound to implement the order of this Tribunal or in the alternative file an appeal before the Higher Court alongwith stay application. Thus, not following the order and direction of this Tribunal, Mr. Shubh Agarwal committed insubordination, by sitting in appeal on the order of this Tribunal. Accordingly, Mr. Shubh Agarwal, Assistant Commissioner is hereby directed to show cause as to why not the statement of contempt be drawn against him and referred to Hon ble Rajasthan High Court for further action in the matter, under the contempt of Court Act. Mr. Shubh Agarwal is hereby given one more opportunity to comply with the Final order of this Tribunal and accordingly in the alternative he may file a compliance report of having complied with the order of this Tribunal, on or before 26.02.2020. Put up for further orders on 26.02.2020.

Summary

Issues:
- Entitlement to interest on delayed refund
- Applicability of CBEC Instructions on refund process
- Compliance with Tribunal's order by Adjudicating Authority
- Allegations of insubordination and contempt of court against Assistant Commissioner

Entitlement to interest on delayed refund:
The Appellate Tribunal CESTAT New Delhi considered the appellant's claim for interest on a delayed refund. The Tribunal set aside the findings of the Commissioner (Appeals) and held that the appellant was entitled to interest on the refund amount from the date of filing the appeal before the Commissioner (Appeals) until the date of refund grant. The Tribunal referred to CBEC Instructions directing the refund process for pre-deposit under Section 35F of the Central Excise Act, stating that a simple letter along with a copy of the order-in-appeal is sufficient for refund application. The Tribunal upheld that the duty paid under protest during investigation/adjudication proceedings qualifies as a pre-deposit under Section 35F, entitling the appellant to interest on the refund.

Applicability of CBEC Instructions on refund process:
The Tribunal emphasized the significance of CBEC Instructions No. 275/35/2000-CX.8A dated 02.01.2002, which streamlined the refund process for pre-deposit under Section 35F. The Instructions clarified that a formal refund application in the prescribed format was not required, and a simple letter along with an attested copy of the order-in-appeal was deemed sufficient for expeditious refund processing by the Board. By referencing these Instructions, the Tribunal supported the appellant's entitlement to interest on the refund amount.

Compliance with Tribunal's order by Adjudicating Authority:
The appellant approached the Adjudicating Authority for the grant of interest as per the Tribunal's order. However, the Assistant Commissioner rejected the grant of interest on the grounds that the claim was not in accordance with the Tribunal's direction. The Assistant Commissioner's decision was deemed as interference in the justice delivery system, as he failed to implement the Tribunal's order. The Tribunal directed the Assistant Commissioner to comply with the order and show cause as to why contempt of court proceedings should not be initiated against him.

Allegations of insubordination and contempt of court against Assistant Commissioner:
The Tribunal found the Assistant Commissioner's rejection of interest as a direct contradiction to the Tribunal's order, indicating insubordination. The Tribunal directed the Assistant Commissioner to comply with the Tribunal's order or face potential contempt of court proceedings. The Assistant Commissioner was given a final opportunity to either comply with the Tribunal's order or submit a compliance report by a specified date.

Overall, the judgment highlighted the importance of adhering to Tribunal orders, the applicability of CBEC Instructions in the refund process, and the consequences of non-compliance by the Adjudicating Authority. The Tribunal emphasized the entitlement of the appellant to interest on the delayed refund amount and directed the Assistant Commissioner to rectify the decision in line with the Tribunal's directive.