2019 (11) TMI 897 - AT - Central Excise

Interest on refund - Time limitation - reversal of CENVAT Credit by coercion - calculation of interest after the expiry of three months from the date of receipt of application under Section 11B (1) of the Central Excise Act i.e. 10/10/2017 - HELD THAT - The Department in fact compelled the appellant to reverse the credit in spite of stay in his favour though the appellant informed the Department that they have got the extension of stay but they could not produce the copy of the stay in time and therefore the Department coerced the appellant to reverse the credit. Further, in the present case the deposit made by the appellant was totally unauthorized because the CESTAT has given him complete waiver - Further it has been consistently held by the Tribunal that if the amount is not voluntarily paid by the assessee and later on the case is decided in favour of the assessee, then he is entitled to interest from the date of deposit made by the assessee. The assessee is entitled to interest from the date of deposit till the date of refund - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against interest disallowance on refund post CESTAT order.

Analysis:
The appellant, a manufacturer of dutiable and exempted goods, faced a demand due to non-maintenance of separate accounts for inputs used in manufacturing. A show-cause notice demanded payment of a specific amount, confirmed by the Commissioner (Appeals) and upheld by the Tribunal. Despite a stay order, the appellant paid the demanded amount under protest. The Tribunal later allowed the appeal, directing a refund. The appellant sought interest on the refund, rejected by the Department. The Commissioner (Appeals) allowed interest from the date of filing the refund application. The appellant argued for interest from the date of recovery, citing precedents like Sandvik Asia Ltd. and Kuil Fireworks. The Department contended that the cases cited were inapplicable as the duty was paid post-investigation, not during a recovery. The Tribunal found that the appellant's payment was coerced despite the stay order, making it unauthorized. Citing precedents like Toyota Kirloskar Auto Parts Pvt. Ltd., the Tribunal held that interest should be paid from the date of deposit, not just the refund application date. Following the precedents, the Tribunal set aside the impugned order, allowing the appeal for interest from the date of deposit.

This detailed analysis of the judgment showcases the legal intricacies involved in the case, including the arguments presented by both parties, relevant precedents cited, and the Tribunal's reasoning leading to the final decision.