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2022 (3) TMI 801 - AT - Central ExciseRejection of interest at 12% on delayed refund - appellant failed to place on record any statutory provisions in support of the claims - whether the appellant are entitled to claim interest @ 12% of the deposit made during the period of investigation till its realization? - HELD THAT - The said issue was allowed in favour of the appellants, inadvertently the rate of interest could not be quoted in the said order. The issue of rate of interest has been decided in the earlier round of litigation, therefore, the appellants are entitled to claim the interest @ 12% from the date of deposit on its realization. As the deposit were made by the appellants under protest, the decisions relied on by the ld.AR are not applicable to the facts of the case in hand. The issue in this case is whether the appellant is entitled to claim interest @12% on delayed refund till its realization has been examined by this Tribunal in the case of M/S. PARLE AGRO PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS SERVICE TAX, NOIDA (VICE-VERSA) 2021 (5) TMI 870 - CESTAT ALLAHABAD wherein this Tribunal has held that the rate of interest varies from 6% to 18% in the aforesaid Notifications issued under sections 11AA, 11BB, 11DD and 11AB of the Excise Act, the grant of interest @12% per annum seems to be appropriate. Thus, the appellants are entitled to claim interest @ 12% per annum of deposit made during the investigation till its realization - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Entitlement to interest on delayed refund. 2. Applicable rate of interest on delayed refund. Issue-wise Detailed Analysis: 1. Entitlement to Interest on Delayed Refund: The appellants contested the rejection of their claim for interest on delayed refund at the rate of 12%. The Tribunal had previously ruled in favor of the appellants, affirming their entitlement to interest from the date of deposit until realization. The authorities, however, granted interest at 6% as per Section 11BB of the Central Excise Act, 1944, leading to the appellants seeking the differential interest, which was subsequently denied by the authorities. The Tribunal reaffirmed that the appellants are entitled to claim interest on delayed refunds, referencing its earlier decision. 2. Applicable Rate of Interest on Delayed Refund: The core issue was whether the interest rate should be 12% or 6%. The appellants relied on a decision by the Allahabad Bench of the Tribunal in the case of M/s. Parle Agro Pvt. Ltd., which supported their claim for 12% interest. The respondent argued that the appellants did not challenge the statutory provisions of Sections 11B and 11BB, which prescribe a 6% interest rate, and thus, their claim for 12% interest lacked legal support. They cited several decisions and statutory notifications to support their stance that only the interest rate specified under the law (6%) could be granted. The Tribunal noted that in the previous litigation, the issue of the interest rate had been addressed, albeit without specifying the rate. It referenced the case of M/s. Parle Agro Pvt. Ltd., where it was determined that there is no specific provision in the Excise Act for the refund of revenue deposits, and thus, guidance was taken from interest provisions under Sections 11AA, 11BB, and 11DD, which range from 6% to 18%. The Tribunal concluded that granting interest at 12% per annum was appropriate, considering various precedents and the absence of a specific statutory provision for revenue deposit refunds. The Tribunal dismissed the respondent's reliance on statutory provisions and previous decisions that supported a 6% interest rate, stating that these were not applicable to the facts of the case at hand, where deposits were made under protest. Conclusion: The Tribunal allowed the appeals, holding that the appellants are entitled to claim interest at 12% per annum on the deposits made during the investigation until their realization, based on the precedent set in the case of M/s. Parle Agro Pvt. Ltd. and the absence of a specific statutory provision governing the rate of interest for revenue deposit refunds. The appeals were thus allowed, granting the appellants the differential interest they sought.
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