2024 (2) TMI 959 - AT - Central Excise

Interest on refund of Education Cess - interest denied on the ground that the refund claimed was on account of pre-deposit whereas the principal amount was reversed by the appellant - HELD THAT This Bench has considered the impugned issue in the case of M/S CADILA PHARMACEUTICALS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, JAMMU 2024 (2) TMI 668 - CESTAT CHANDIGARH where the Bench observed If the Department is barred from raising demands for the refunds already granted, the appellants also cannot seek interest on the refunds already granted. Hon ble Apex Court in the case of COMMISSIONER OF CGST AND CENTRAL EXCISE (J AND K) VERSUS M/S. SARASWATI AGRO CHEMICALS PVT. LTD. 2023 (7) TMI 542 - SC ORDER observed that the subsequent decision of this Court overruling M/S. SRD NUTRIENTS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE GUWAHATI 2017 (11) TMI 655 - SUPREME COURT in the case of M/S. UNICORN INDUSTRIES VERSUS UNION OF INDIA OTHERS 2019 (12) TMI 286 - SUPREME COURT cannot have a bearing on past decisions which had attained finality although they had followed SRD Nutrients (P) Limited, which was subsequently overruled in M/s Unicorn Industries. Otherwise, a pandora s box would be opened and there would be no end to litigation, which is against public policy. The appellants have not made out any case for grant of refund - Appeal dismissed.

Summary

Issues involved:
The issue involves whether the appellants are entitled to interest on the refund sanctioned to them by the Department following the orders passed by the Tribunal, considering the decision of the Hon'ble Apex Court in a specific case.

Summary:
The appellants had set up units in Jammu and claimed the benefit of a specific notification for refunds. While the Department sanctioned the refund of Excise Duty, the refund of Education Cess was rejected. The Appellate Authority initially allowed the appeals, but the Department filed further appeals which were dismissed by the Bench following the judgment of the Hon'ble Apex Court in a particular case. The appellants pursued the claim of refund of Education Cess, which was granted but without interest. The appellants approached the Hon'ble High Court of Jammu, Kashmir & Ladakh, which directed them to seek alternative remedies. The Appellate Authority held that since the decision of the Hon'ble Supreme Court in a specific case was reversed in another case, the refund itself was not admissible, and hence, the question of interest did not arise.

The learned Counsel for the appellant argued that interest should be payable on the refund as it was in the nature of a pre-deposit. The Department, represented by the Authorized Representative, contended that no interest liability arises as the amount was not deposited as per specific sections of the Central Excise Act. The Department also relied on previous judgments to support their stance.

After considering the arguments from both sides and reviewing the case records, the Bench noted that the Department had raised demands on refunds granted to various assessees following a Supreme Court judgment. The Hon'ble High Court of Jammu & Kashmir held that a change in opinion of the Court in a subsequent matter does not allow appellants to reopen decisions that have attained finality. The Bench concurred with this view, stating that allowing interest on refunds already granted would open a pandora's box of litigation.

The Bench further referenced a Circular clarifying that certain provisions of the Central Excise Act do not apply to refunds under specific Exemption Notifications. Citing previous judgments and upholding the decisions of higher courts, the Bench concluded that the appellants had not made a case for interest on the refunds. The appeals were subsequently rejected.

This judgment was pronounced on 20/02/2024.