2021 (11) TMI 10 - AT - Central Excise

Interest on refund claim - deposit made under protest or not - applicability of time limitation - Section 11B/11BB of Central Excise Act, 1944 - HELD THAT - In the present case initially a demand of ₹ 33,02,559/- as an amount of Central Excise Duty on the goods destroyed in the fire accident in the premises of the appellant was confirmed. During the pendency of the adjudication of the said demand, the accounts of the appellant for the period 2008-09 to 2010-11 were audited. Pursuant to the directions of the Audit that the appellants reversed the Cenvat Credit of ₹ 13,96,738/- vide RG-23 A on 24.05.2012 which was an amount attributed to the inputs for the finished goods lost in the fire accident. There is nothing on record to hold that the said amount was paid under protest by the appellant. Since, there is no protest for the demand of Excise Duty on the goods destroyed, for this reason also, there is no reason to hold that the impugned amount of ₹ 13,96,738/- which was an amount for the inputs for the goods lost in the said fire, was not the amount of duty paid. The appellant is not at all entitled for the interest that too, from the date of payment of the amount i.e. 24.05.2012. The interest from the date of application also is not required to be paid for the reason that the refund was sectioned within three months - there are no infirmity in the findings given by Commissioner (Appeals) - appeal dismissed.

Summary

Issues:
1. Claim of interest on sanctioned refund amount under Section 11BB of Central Excise Act, 1944.

Analysis:
The appeal in this case was filed to challenge an order related to the recovery of excise duty on goods destroyed in a fire accident at the appellant's factory premises. The appellant, engaged in the manufacture of TPR compound, faced a demand of ?33,02,559/- as excise duty on the destroyed goods. After a series of legal proceedings, including appeals and refund applications, a refund of ?13,96,738/- was sanctioned to the appellants. Subsequently, the appellant filed an application for interest on the sanctioned amount from the date of payment until the date of the refund order. The rejection of this interest claim was the central issue in this appeal.

The appellant contended that the interest claim was wrongly rejected under Section 11BB of the Central Excise Act, 1944. They argued that this section applies only when a refund is claimed against the payment of duty, not against a deposit made under protest. On the other hand, the Department argued that the deposit in this case was not made under protest and that the refund was sanctioned within the prescribed period under the Act. The Department maintained that there was no basis for the interest claim and requested the dismissal of the appeal.

Upon reviewing the case and considering the arguments presented, the Member (Judicial) found that the appellant had reversed the Cenvat Credit of ?13,96,738/- during the pendency of the demand for excise duty on the destroyed goods. It was noted that there was no evidence to suggest that this amount was paid under protest. The Member concluded that since the refund was sanctioned within three years of the application, the appellant was not entitled to interest on the refunded amount. The Member upheld the findings of the Commissioner (Appeals) and dismissed the appeal, stating that there was no infirmity in the order.

In summary, the appellate tribunal upheld the decision to reject the appellant's claim for interest on the sanctioned refund amount, emphasizing that the refund was granted within the statutory period and there was no basis for the interest claim under Section 11BB of the Central Excise Act, 1944.