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2020 (11) TMI 192 - AT - Central ExciseInterest on delayed refund claim - claim of interest rejected on the ground that in terms of Section 35FF of Central Excise Act, 1944, interest is only to be granted after expiry of three from the date of order of appellate authority - HELD THAT - I am in agreement with the claim of the learned Counsel that the amount of ₹ 15 Lakh deposited was not under the provisions of Section 35F and therefore, the provisions of Section 35FF which reads as under, will not apply - It is clear that Section 35FF is only for recoveries made under Section 35F. In these circumstances, I have no doubt in holding that order of Commissioner (Appeals) is incorrect and based on wrong premise. Learned Authorised Representative argued that no application for refund of interest is made under Section 11B on 24.12.2007 - the appreciation of learned Authorised Representative regarding Section 11B is improper and incorrect. The reference to refund of interest in Section 11B, is to the interest, if any, paid by the assessee along with duty. Section 11B does not apply to the claim of interest on the refund of duty to the appellant. In respect of claim of interest of duty to the appellant, Section 11BB applies - there are no merits in the argument of the learned Authorised Representative that the appellants were required to claim interest along with refund of duty. Section 11BB prescribes that interest is to be granted suo-moto along with refund. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Denial of interest on refund claim. 2. Applicability of Section 35FF of Central Excise Act, 1944. 3. Applicability of Section 11B and Section 11BB of Central Excise Act, 1944. Detailed Analysis: 1. Denial of Interest on Refund Claim: The appellant, a manufacturer of Cellulose powder, claimed a refund of ?15 Lakhs, which was seized by the Central Excise officers in August 2007. The appellant argued that the amount was taken through blank cheques filled in by the officers. The initial refund claim submitted on 24.12.2007 was rejected by the lower authorities. The Tribunal allowed the appeal with consequential relief, but the Revenue adjusted the ?15 Lakhs against a confirmed demand of ?46,40,538/-. The Tribunal later allowed the appeal both on merits and on the issue of refund. The refund was granted without interest, leading the appellant to approach the Commissioner (Appeals), who rejected the claim for interest. 2. Applicability of Section 35FF of Central Excise Act, 1944: The Commissioner (Appeals) rejected the interest claim based on Section 35FF, which provides for interest on delayed refunds of amounts deposited under Section 35F. The appellant contended that Section 35FF does not apply as the ?15 Lakhs was not deposited under Section 35F but was erroneously taken in September 2007. The Tribunal agreed, stating that Section 35FF applies only to amounts deposited under Section 35F, and thus, the provisions of Section 35FF were not applicable to the ?15 Lakhs in question. 3. Applicability of Section 11B and Section 11BB of Central Excise Act, 1944: The appellant argued that interest should be granted under Section 11BB, which mandates interest on delayed refunds from three months after the original application date. The Tribunal noted that Section 11B concerns claims for duty and interest paid on such duty, while Section 11BB pertains to interest on delayed refunds. The Tribunal found that the appellant's claim for interest was valid under Section 11BB, as the interest is to be granted suo-moto along with the refund. The Tribunal also addressed the Revenue's argument regarding Section 11B(5)(B)(ec), clarifying that it pertains to the relevant date for limitation purposes and does not affect the interest claim. Conclusion: The Tribunal concluded that the Commissioner (Appeals) erred in rejecting the interest claim based on Section 35FF. The Tribunal held that the appellant was entitled to interest on the ?15 Lakhs from three months after the original refund application date, as per Section 11BB, and set aside the impugned order. The appeal was allowed, and the judgment was pronounced in open court on 05.11.2020.
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