2024 (5) TMI 272 - AT - Central Excise

Re-quantification of interest (on the refund of the pre-deposit) payment to the appellant - relevant time - interest to be paid from the date of deposit of the amount or from three months from the date of communication of the order? - HELD THAT - The pre-deposit has been made by the appellant during February/March 2006 and May 2013. During the relevant period Section 35(FF) of CEA 1944 as reproduced above laid down for payment of interest on delayed refund of pre-deposit only after the expiry of three months from the date of communication of the order of the appellate authority till the date of refund of such amount. There is no dispute that the said impugned order was passed after the amendment in Section 35FF ibid but it has to be borne in mind that in terms of proviso below amended Section 35(FF) of CEA 1944 the payment of interest on pre-deposit made prior to 06.08.2014 has to be governed by pre-amended Section 35(FF) of CEA 1944 only. It is also that CESTAT being a creature of the statute cannot traverse beyond the provisions of the Statute. This view has been held in a catena of decisions viz. M/S. KALI AERATED WATER WORKS REPRESENTED BY ITS PROPRIETOR K.P.D. RAJENDRAN VERSUS THE CUSTOMS EXCISE AND SERVICE TAX THE COMMISSIONER OF CENTRAL EXCISE NGO A COLONY TIRUNELVELI 2022 (11) TMI 795 - MADRAS HIGH COURT . This view is resonated in similar other decisions viz. M/S VEER OVERSEAS LTD. VERSUS CCE PANCHKULA 2018 (4) TMI 910 - CESTAT CHANDIGARH AJAY EXPORTS VERSUS COMMISSIONER OF CUSTOMS (IMPORT) MUMBAI 2015 (12) TMI 996 - CESTAT MUMBAI and MAA MAHAMAYA INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE CUSTOMS AND SERVICE TAX VISAKHAPATNAM-I COMMISSIONERATE 2014 (11) TMI 747 - ANDHRA PRADESH HIGH COURT . Accordingly the provisions regarding payment of interest as provided in the Central Excise Act 1944 shall prevail and the Tribunal cannot intervene in this regard. There are no infirmity in the impugned order - appeal dismissed.

Summary

Issues:
The issues involved in the judgment are the remand of interest payment by the Commissioner (Appeals) and the violation of principles of natural justice in passing the order ex-parte.

Remand of Interest Payment:
The appellant, engaged in manufacturing PVC products, faced allegations of issuing invoices without supplying goods and receiving Cenvatable invoices without actual receipt of inputs. The Adjudicating Authority confirmed a demand of approximately Rs.9.73 crores against the appellant with interest and imposed a penalty. The Tribunal allowed the appellant's appeal and directed a refund of Rs.1.65 crores with interest. However, the Commissioner (Appeals) remanded the matter for re-quantifying the interest amount based on the statutory provisions u/s 35(FF) of CEA, 1944. The appeal before the Tribunal challenged this remand order, arguing that it violated principles of natural justice as the order was passed ex-parte without a personal hearing.

Violation of Principles of Natural Justice:
The appellant contended that the impugned order was passed in violation of natural justice as it was ex-parte without providing an opportunity for a personal hearing. The appellant claimed they did not receive the notice for personal hearing, and on the date of the supposed hearing, they attended another matter before the same authority. The appellant also argued that the appeal filed by the Revenue was time-barred, and they were not given a chance to raise this plea due to the ex-parte order. Additionally, the appellant sought interest on the pre-deposit amount from the date of deposit or at least from the date of receipt of the order, citing relevant case laws to support their claim.

Conclusion:
The Tribunal upheld the remand of the interest payment by the Commissioner (Appeals) based on the statutory provisions of Section 35(FF) of CEA, 1944. The Tribunal emphasized that the payment of interest on pre-deposit made prior to 06.08.2014 should be governed by the pre-amended Section 35(FF). The judgment highlighted that the Tribunal cannot intervene beyond the provisions of the Central Excise Act, 1944, and cited Supreme Court decisions to support this stance. Ultimately, the appeal was dismissed, affirming the impugned order.