2022 (1) TMI 507 - AT - Central Excise

Refund - amount paid during the investigation is under protest - main thrust of the ld. A.R. is that the amount deposited by the appellants during the course of investigation has taken the shape of pre-deposit - HELD THAT - This Tribunal has observed that the amount deposited by the appellant is sufficient for the purpose of Section 35, therefore, this Tribunal dispensed with the condition of pre-deposit of balance amount of dues. From going through the observations of this Tribunal, it is found that the observation of the Tribunal does not say that the amount paid during the course of investigation has taken the shape of pre-deposit. This Tribunal only found that it s sufficient for the purpose of Section 35 of the Act. Further from the facts, it is clear from the order-in-original that the course of investigation, the cheques of ₹ 50 lakhs were tendered on 24.08.2010 was under pressure. The adjudicating authority has held that as they have not filed any complaint for signing the cheques under pressure, it means that they were willingly and concisely paid the amount against their liability. The amount paid during the course of investigation was under protest. The same view was taken by the various High Courts as in the case of THE COMMISSIONER OF CENTRAL EXCISE, COIMBATORE VERSUS M/S. PRICOL LTD., THE CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL 2015 (3) TMI 735 - MADRAS HIGH COURT , wherein the Hon ble Madras High Court has held that there are also many judgments of various courts, which also reiterative the same principle in case any amount is depositing during the pendency of adjudication proceedings or investigation, the said amount would be in nature of deposit under protest. The appellants are entitled for interest @12% p.a. from the date of deposit till the date of realization of refund of the amount paid during investigation - Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Admissibility of interest on the amount deposited under protest during investigation

Analysis:
1. The case involved a dispute regarding the admissibility of interest on the amount deposited under protest during an investigation to avail the benefit of duty free clearances under SSI exemption Notification No. 8/2003-CE. The appellants contended that interest should be paid on the amount deposited from the date of deposit till the date of refund at a rate of 12% per annum, citing various judgments supporting their claim.

2. The appellants argued that the amount deposited under protest during the investigation should be considered as a deposit under protest, entitling them to interest. They relied on judgments such as C.C.E. Coimbatore vs. Pricol Ltd. and C.C.E. Lucknow vs. Eveready Industries India Ltd., which supported the principle that any amount deposited during the pendency of adjudication proceedings or investigation is in the nature of a deposit under protest. They also cited decisions by the Hon'ble Madras High Court and other tribunals to strengthen their argument.

3. On the other hand, the respondent opposed the appellants' claim, arguing that the amount paid during adjudication was a pre-deposit, not a deposit under protest. They referred to the decision of the Hon'ble Apex Court in CCE Hyderabad vs. ITC Ltd., stating that interest on delayed refund is payable after three months from the date of the final adjudication order. The respondent also relied on the decision of the Hon'ble Delhi High Court in Nino Chaks Pvt Ltd vs. CC (Gen), emphasizing that claiming interest from the date of payment during the investigation is not sustainable.

4. After considering the arguments and case laws presented by both parties, the Tribunal analyzed the nature of the amount deposited during the investigation. The Tribunal found that the amount paid under pressure during the investigation was indeed under protest, entitling the appellants to interest. Citing various judgments and the latest decision of the Tribunal in M/s Jovex International, the Tribunal held that the appellants were entitled to interest at a rate of 12% per annum from the date of deposit till the realization of the refund.

5. Consequently, the appeals were allowed in favor of the appellants, granting them the interest on the amount deposited under protest during the investigation.