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2021 (5) TMI 870 - AT - Central ExciseQuantum of interest on refund - grant of interest at 12% instead of 6% - time limitation for calculation of interest - appellant sought that the interest should be calculated from the date of deposit of the amount - HELD THAT - In the present case, the provisions of section 11B of the Excise Act would not be applicable. This is for the reason that the appellant was not claiming refund of duty. The applicant, as noticed above, had claimed refund of the revenue deposit. Such a finding has also been clearly recorded by the Tribunal in the order dated 31.01.2017, which order has attained finality - There is no provision in the Excise Act, which deals with refund of revenue deposit and so rate of interest has not been prescribed, when revenue deposit is required to be refunded. In RIBA TEXTILES LTD VERSUS COMMISSIONER OF CE ST, PANCHKULA 2020 (2) TMI 602 - CESTAT CHANDIGARH , the Tribunal also granted interest at the rate of 12% on refund of amount deposited during investigation and at the time of entertaining the stay application - the rate of interest varies from 6% to 18% in the aforesaid Notifications issued under sections 11AA, 11BB, 11DD and 11AB of the Excise Act, the grant of interest @12% per annum seems to be appropriate. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the interest on the refund amount should be granted at 12% instead of 6%. 2. Whether the order dated 28.05.2019 by the Commissioner (Appeals) should be set aside. Issue-wise Detailed Analysis: 1. Interest Rate on Refund Amount: The appellant, M/s. Parle Agro Pvt Ltd, filed Excise Appeal 70628 of 2019 seeking modification of the order dated 28.05.2019 by the Commissioner (Appeals), which granted interest at 6% on the refund amount. The appellant contended that the interest should be at 12% per annum. The Assistant Commissioner had initially sanctioned the refund claim with interest from the date the appellant became entitled to claim the refund (01.12.2005) up to the date of the Tribunal's order (31.01.2017). The Commissioner (Appeals) later granted interest from the date of deposit but maintained the rate at 6%. The appellant argued that the provisions of Section 11B of the Central Excise Act, which deal with refund of duty, were not applicable as the amount in question was a revenue deposit, not central excise duty. This was supported by the Tribunal's order dated 31.01.2017, which had attained finality. The appellant cited several decisions, including Sandvik Asia Ltd. and Pace Marketing Specialities, where higher interest rates were granted on similar refunds. The Tribunal, referencing various sections of the Central Excise Act (11AA, 11BB, 11DD, and 11AB), noted that interest rates in these provisions ranged from 6% to 18%. Considering this, and the precedent set by previous judgments, the Tribunal found that granting interest at 12% per annum was appropriate. Therefore, the Tribunal allowed the appeal, modifying the order to grant interest at 12% from the date of deposit till the date of payment. 2. Setting Aside the Order Dated 28.05.2019: The Principal Commissioner filed Excise Appeal 70674 of 2019 to set aside the order dated 28.05.2019 by the Commissioner (Appeals). The Department argued that the amount in question was central excise duty, not a revenue deposit. The appellant filed cross-objections, asserting that the appeal was not maintainable as the finding that the amount was a revenue deposit had already attained finality in the Tribunal's order dated 31.01.2017, which the Department did not challenge. The Tribunal accepted the appellant's submission, noting that the Department had accepted the order dated 31.01.2017, as evidenced by a letter from the CGST Commissioner of Noida. Furthermore, the Assistant Commissioner had ordered the refund of the amount, and this order was not contested by the Department. Consequently, the Tribunal dismissed the Department's appeal and allowed the cross-objections filed by the appellant. Conclusion: The Tribunal allowed Excise Appeal No. 70628 of 2019, modifying the order to grant interest at 12% per annum from the date of deposit till the date of payment. Excise Appeal No. 70674 of 2019 filed by the Principal Commissioner was dismissed, and the cross-objections by the appellant were allowed.
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