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TMI Blog2006 (9) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Tribunal had allowed the appeal by its order dated 14-5-2003 [reported in 2003 (156) E.L.T. 56 (Tri.-Del.)] and the assessee became entitled to the refund of the pre-deposit amount. The said application dated 30-6-2003 was, therefore, submitted seeking the refund of the pre-deposit amount with interest. Pursuant to the said application, the pre-deposit amount of Rs. 4,30,000/- was ordered to be refunded and such refund came to be sanctioned under section 11B of the said Act. The cheque of the said amount was forwarded with the sanctioned order dated 14-8-2003 made by the Assistant Commissioner. 2.1 Thereafter, by letter dated 10-9-2003 the Assistant Commissioner informed the appellant that the refund claim was sanctioned within the prescribed time limit and hence the question of payment of interest did not arise. Thereafter, the appellant again by letter dated 11-11-2003 made a request for the claim of the interest on the refund of the pre-deposit amount. In response thereto, the appellant was informed that the interest could not be granted on the refund of pre-deposit and also on the ground that the refund was made within the stipulated time of three months. 2.2 In the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fireworks Industries v. CCE reported in 1997 (95) E.L.T. 3 (S.C.), was cited to point out from paragraph 7 of the judgment that the Supreme had directed that the amount of Rs. 2,00,000/- which was deposited by the appellant be refunded to the appellant with interest @ 12% and the bank guarantee of Rs. 1,50,000/- furnished by the appellant shall stand discharged. The dispute before the Hon ble the Supreme Court in this case was in the context of the order of the Appellate Tribunal, which was set aside by the Hon ble the Supreme Court quashing the demand raised by the Assistant Collector. As a result amount of Rs. 1,50,000/- paid by that appellant towards the impugned demand of excise and a further sum of Rs. 1,50,000/- paid in terms of the interim order of the Tribunal, were ordered to be refunded with interest @ 12%. (b) The decision of the Hon ble the Supreme Court in CCE, Hyderabad v. ITC Ltd., reported in 2005 (179) E.L.T. 15 (S.C.), was referred for making a comment that the said decision did not give facts or reasons and therefore, it was not law laid down by the Hon ble the Supreme Court. The question before the Hon ble the Supreme Court was whether pre-deposit made as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funded. The Tribunal referred to the circular of the Board dated 2-1-2002 clarifying that deposits should be returned in the event the appellants succeed in the appeal or the matter is remanded for fresh adjudication. In paragraph 9 of the judgement, the Tribunal held that both the appellants were entitled to interest as the amount of pre-deposit was refunded immediately after the order was made by the Tribunal. Relying on the decision of the larger bench of the Tribunal in M/s. Sheela Foam Pvt. Ltd. v. CCE, Noida reported in 2003 (154) E.L.T. 522, the Tribunal held that the assessee was eligible to interest on the amount of pre-deposit from the date of expiry of three months from the date of the receipt of the final order dated 19-10-94 made by the Tribunal till the date of payment. (f) The decision of the Hon ble the Supreme Court in Ram Bai v. Commissioner of Income Tax reported in (1999) 3 S.C.C. 30, was referred to for the proposition that the ITO could not have applied the test different from that laid down by the full bench judgement of the Andhra Pradesh High Court which was holding the field at the relevant time. 4. The learned authorized representative for the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . According to the learned authorized representative for the department, the said circular came to be issued on 8-12-2004 [See 2004 (174) E.L.T. T9]. Referring to that circular from the paper book at Annexure P/7, it was contended that the emphasis of the instructions contained therein was on return of pre-deposits made as per direction of the CESTAT in terms of Section 35F. It was stated therein that, in terms of the Hon ble Supreme Court s order, such pre-deposits must be returned within three months from the date of the order passed by the Appellate Tribunal/Court or other final authority, unless there was a stay on the order by a superior Court. The learned authorized representative for the department finally referred to the decision of the Gujarat High Court in Padmanabh Silk Mills v. Union of India reported in 2006 (193) E.L.T. 536 (Guj.), in which after considering the decisions of the Tribunal and also the decision in Kuil Fireworks Industries v. CCE (supra), the division Bench of the High Court in the context of provisions of Sections 11B and 11BB of the said Act, held that from the bare reading of Section 11B(2) and 11BB of the Act, it was clear that if the concerned auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a condition for hearing the appeal under Section 35F while deciding the application for stay. Under Section 35F of the Act, in cases where the appeal before the Tribunal related to any duty demanded in respect of goods which were not under the control of the Central Excise authorities, or penalty levied under the Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied subject to the proviso thereunder which enabled the Appellate Tribunal to dispense with such deposit, subject to such conditions as may deem fit to be imposed so as to safeguard the interest of revenue. It is evident from the provisions of Section 35F that ordinarily, unless dispensed with, the entire duty was required to be deposited when a person is desirous of appealing against the order demanding such duty. However, when the Appellate Tribunal is of the opinion that the deposit of duty demanded would cause hardship, it may dispense with such deposit of duty subject to conditions.. It is clear from the wordings of Section 35F of the Act that the pre-deposit will be of the duty demanded under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h has relevance to the present dispute reads as under :- 11BB. - Interest on delayed refunds .......................... Explanation. - Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal or any court against an order of the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, under sub-section (2) of section 11B, the order passed by the Commissioner (Appeals), Appellate Tribunal or, as the case may be, by the court shall be deemed to be an order passed under the said sub-section (2) for the purposes of this section. This explanation appears to have been incorporated because Section 11B(2) refers to order of refund made by the Assistant Commissioner or Deputy Commissioner of Central Excise. In view of this explanation even when the order of refund is made by the Appellate Tribunal or any Court against an order of the Assistant Commissioner or Deputy Commissioner which was made under sub-section (2) of Section 11B, such Appellate order of the Tribunal or the court shall be deemed to be an order passed under the said sub-section (2) (of Section 11B) for the purpose of this section . Therefore, in cases where the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal or revenue authorities to award interest contrary to the provisions of Section 111BB on the delayed refunds. As held by the Hon ble the Gujarat High Court Padmanabh Silk Mills v. Union of India (supra), where specific application is made under Section 11B(2) of the Central Excise Act, 1944 for interest on delayed refund then the same had to be considered and decided by the authority in the light of the provisions of Section 11B(2) as well as Section 11BB of the Act, as Section 11BB provides interest for delayed refund of duty and not of deposit. It was held that the authority was, therefore, right in rejecting the refund on delayed refund. The Hon ble High Court held in paragraph 11 of the judgement that, from a bare reading of Section 11B(2) and 11BB of the Act, it was clear that if the concerned authority was satisfied on the claim of the applicant for refund, then the refund was to be paid within three months from the date of the receipt of the application, and if it was not so paid then interest had to be paid on it under Section 11BB of the Act. This decision of the Hon ble Gujarat Court fortifies the conclusion that the claim for interest made by the appellant in r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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