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TMI Blog2009 (7) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant or as per Chapter 54 as held by the Department. This dispute stands settled in favour of the assessee. (b) In pursuance of Tribunal's order, the original authority, by his order dated 10-5-07 allowed the appellant to take credit of Rs. 22,46,020/- in their Cenvat credit account. The Commissioner (Appeals) by his order dated 7-8-07 has modified the order of the original authority by allowing the same as cash refund. However, he has not accepted the prayer for payment of interest. 4. The ld. advocate submits that during the relevant period, the appellant was compelled to deposit the duty amount which was done under protest in cash from PLA account. The credit is allowed later on by the department. But, it is nothing but a refund of duty paid on input credit as per provisions of Section 11B(2)(c) of the Act. Therefore, denial of interest is not legal. The learned advocate relies on the following judgments. (a) CESTAT AHD's Order No. A/2885/WZB/AHD/2007, dt. 27-11-07, - CCE Ahmedabad v. M/s. Olympic Synthetics - 2009 (236) E.L.T. 526 (T). (b) 2004 (170) E.L.T. 13 (Tribunal-LB) = 2004 (115) ECR 244 (Tri.-LB) - Rama Vision Ltd. v. CCE, Meerut. (c) 2004 (165) E.L.T. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- is eligible as credit in their Cenvat account being surplus credit but rejected the claim for interest. He has allowed the credit based on the Xerox copies of the documents on the basis of verification report by the Range Supdtt. (e) The Commissioner (Appeals), after appreciating the developments of the closure of the unit, modified the order of the Original Authority by making it as refund in cash. 5.3 If the products in question, instead of being classified under Chapter 54, were classified under Chapter 39 then, during the period up to 31-3-92, the appellant would have been eligible for a credit of Rs. 46,86,244/- and would have paid only Rs. 40,90,529/- and would have ended with a surplus of credit of Rs. 6 lakhs. 5.4 Normally the total duty payable on the finished product would be more than the total credit taken on the input. In this case, the input and output were both falling under Chapter 39 and carried the same rate of duty, but the appellant has also availed exemption available to small scale units during certain period and hence the actual credit taken happens to be more than their actual duty payable on the finished products. Thus, as the duty on the input whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled to take Modvat credit and pay the duty out of such credit. It was on the insistence of the Revenue and on account of classification dispute that the appellants were made to pay the duty in respect of tape on cash basis. Had they taken the Modvat credit during the relevant period, they were in a position to utilize such credit for payment of duty, in which case, cash payment made by them would not have been made. 10. As such, I feel that essentially it is a case of refund of cash payment made during the relevant period, on settlement of dispute of classification in their favour. The appellant, having deprived of the facility of Modvat credit, which credit would have been used by them for payment of duty on tape, the cash payment made by them needs to be made along with interest. 11. As such, I am of the view that it is not a simple case of refund of Modvat credit in which case, the provisions of Section 11B may not be attracted, but it is a refund of duty paid in cash under Chapter 54 and allowing of credit and adjustment of said credit towards payment of duty under Chapter 39. As such, I agree that the appellant is entitled for interest and I, accordingly, hold so. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 39 came to Rs. 40,90,529/- but the Modvat credit eligibility came to Rs. 46,86,244/-. After several rounds of litigation, it has been finally concluded in appellants' favour that they are eligible for the Cenvat credit. The net result is that, the appellant need not have paid any duty in cash if the goods were to be classified correctly as claimed by them under Chapter 39. He also submits that the Tribunal in C.C.E., Ahmedabad v. Olympic Synthetics reported in 2009 (236) E.L.T. 526 (Tri.-Ahmd.) in a similar case has taken a view that interest was available on the refund granted. He also submits that the facts are similar in both the cases. Further, he also submits even if a view is taken that if the credit is allowed in RG 23A Part-II, even then interest is admissible. For this purpose, he cites the decision of Commissioner (Appeals) in order-in-appeal No. 118/2006/Ahd-II/CE/DK/ Commissioner (A), dated 31-3-2006 and submits no appeal has been filed against the decision in the above order allowing interest on Cenvat credit restored in the RG 23A Part-II account. He also cites the decision of the Tribunal in Reliance Industries Ltd. v. C.C.E., Vapi vide Order No. A/1397-1405/WZB/AH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore appellants are not eligible for interest. 17. In this case I find that in the Order-in-Original passed by the Assistant Commissioner on 14-7-99, Modvat credit claimed for Rs. 24,71,099/- was rejected on the ground that the same is not admissible. Taking the eligible Modvat credit as Rs. 22,16,144/-, the Assistant Commissioner calculated the eligible refund amount as Rs. 1,86,401/-. The calculation made by her is as under : (i) Modvat credit available on HDPE Granules used in the manufacture of Tapes/Strips 22,16,144/- (ii) Duty paid under Chapter 54 on HDPE tapes 19,76,729/- 41,92,873/- (iii) Duty payable under Chapter 39 on re-classification 40,06,472/- Refund due in Modvat account as per directions of OIA 1,86,401/- 18. She also allowed interest on this amount to the appellants. The Modvat credit which was disallowed on the ground that documents were not available or they were invalid documents was reversed finally by the Tribunal and as a result of the decisions of the Tribunal, in the de novo adjudication proceedings, the Assistant Commissioner vide his order dated 10-5-2007 allowed Rs. 22,46,020/- as Modvat credit in their account and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no dispute about eligibility of the appellants for the refund and the refund to be allowed is only cash refund, it has to be held that appellants are eligible for interest on the refund claimed by them. Further, as pointed out by the learned consultant, interest is admissible if the refund claim was pending as on the date of introduction of Section 11BB and not finalized. 19. I also find that the decisions of the Tribunal in Olympic Synthetics and the decision of the Commissioner (Appeals) cited by the learned consultant on behalf of the appellants are exactly on similar set of facts and my view that appellants are eligible for interest is also supported by the decision of the Tribunal. The learned D.R. cited several decisions but I found that none of them are relevant to the facts of the case discussed above. 20. In view of the above discussion, with great respect to learned Member (Technical), I concur with the view taken by the learned Member (Judicial). 21. The records shall be placed before the Regular Bench for pronouncement of the majority decision. Sd/- B.S.V. Murthy Member (Technical) FINAL ORDER In view of the majority order, the appeal is allowed by upholding the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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