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TMI Blog2016 (2) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount is payable/refundable to the respondents w.e.f.22.6.2007, do not find any ground to demand interest on the very same amount alleging that the respondents took credit irregularly. The impugned order calls for no interference. - Decided in favour of assessee - Appeal No. E/52862/2014-Ex-SM, with E/CO/54535/2014 - Final Order No. A/53429/2015-SM(BR) - Dated:- 12-11-2015 - Sulekha Beevi CS, Member (J) For the Appellant : Shri R K Mishra, AR For the Respondent : Shri Abhishek Jaju, Adv ORDER Per Sulekha Beevi CS Revenue has filed the above appeal challenging the order passed by the Commissioner (Appeals) which held that the respondents are not liable to pay interest alleged to have incurred on account of demand raised on having taken suo moto credit of ₹ 10,91,728/- which was due to them by way of refund of pre-deposit. This case unravels the litigatory travel of an assessee to get refund of pre-deposit. For better understanding of the issue under consideration, it is necessary to narrate the events chronologically which is as under: 1.1 M/s. Sainsons Paper Industries Ltd., the respondents herein, are engaged in the manufacture of paper and pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that pre-deposit has to be refunded without an application, it does not give away the requirement of an order sanctioning refund passed by competent authority. The Commissioner (Appeals) vide Order-in-Appeal dated 3.11.2010 confirmed the demand but reduced the penalty to ₹ 50,000/-. 4. The respondents herein, then submitted an application for refund of ₹ 10,91,728/- dated 31.12.2010 which is said to be received by department on 11.1.2011. Thereupon a show cause notice dated 4.4.2011 was issued proposing to reject the refund claim on the ground that the application is time barred. After adjudication, the order-in-original dated 26.4.2011 was passed rejecting the refund claim for the reason that the application is time barred as per section 11B of the Central Excise Act, 1944. The said order was challenged by respondents herein by filing an appeal. In such appeal, besides raising their contentions on merits, the respondents had also contended that the order was passed without giving sufficient opportunity of personal hearing. Vide Order-in-Appeal dated 16.2.2012, the Commissioner (Appeals) without going into the merits of the refund claim, set aside the order rejecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd. That as per Board's circular, no application is required to be submitted for refund of pre-deposit. That from the date of Order-in-Appeal dated 22.6.2007, when the appeal was allowed in their favour with consequential relief, they were entitled to the amount. That in any case, there was no recovery due and there is no liability to pay interest. 9. I have heard the rival submissions and perused the records. The issue before me is whether the respondents herein are liable to pay interest on account of taking credit in their cenvat account without an order sanctioning refund of the pre-deposit amount which was to be refunded to them. 10. The pre-deposit of ₹ 10,91,728/- was deposited by respondents during pendency of their appeal by debit entry in their Cenvat Credit account in May 2006. The Order-in-Appeal dated 22.6.2007 allowed their appeal with consequential relief. Thus they became entitled to get refund of the pre-deposit amount. The respondents took refund of the amount by taking credit of the said amount in their Cenvat credit account in June, 2007. They declared the same in their ER-I returns of July, 2007. On 22.2.2008 they submitted a letter to Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court. Having regard to the contents of the draft circular we direct compliance with the final order impugned before us and payment of interest in terms of the draft circular. The draft circular shall be appended to and the contents form part of this order. The appeal is disposed of. In view of this order any judgment of any High Court holding to the contrary will no longer be good law. 12.2 The above judgement held that interest is payable on the pre-deposit commencing from three months after the final disposal of the dispute between the parties. This Tribunal after referring to the C.B.E. C Instruction No.F.275/37/2k-Cx.8A dated 2.1.2002 and C.B.E. C Circular No.802/35/2004-CX dated 8.12.2004 in the following judgements has observed that an application for refund is not required for refund of pre-deposit. (i) Coco Cola India Pvt.Ltd. vs. CC, Pune-2014 (311) ELT 816 (Tri.-Mumbai) (ii) Lorenzo Bestonso vs. Commissioner of Customs (Import), Nhava Sheva-2015 (315) ELT 478 (Tri.-Mumbai) (iii) Commissioner, Pune vs. SMZS Chemicals Ltd.-2014 (310) ELT 396 (Tri.-Mum.) 12.3 A new section 35FF was inserted w.e.f.10.5.2008 with regard to interest on delayed ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit. The only dispute is that the respondents ought not to have taken refund by taking credit of the amount in their cenvat account and thereby taking a suo motto refund of pre-deposit. As per the appellate order dated 22.6.2007 the pre-deposit amount has to be refunded to the respondent. The act of the respondents in taking refund of the amount by crediting the amount in their cenvat credit account, in my view, is only a procedural lapse. After taking credit, the respondents have declared the same in their ER-1 returns of July, 2007 itself. Moreover, they sent a letter dated 22.2.2008 along with copy of appellate order and requested for permission to utilize the credit, besides their request to issue formal order of sanctioning refund. All these establish that there was no suppression or pre-meditated act to evade payment of duty. The right of the party to get refund of pre-deposit cannot be denied on account of a procedural lapse. The Assistant Commissioner in any case ought to have considered the letter dated 22.2.2008 as an application for refund. As the amount is payable/refundable to the respondents w.e.f.22.6.2007, I do not find any ground to demand interest on the very ..... X X X X Extracts X X X X X X X X Extracts X X X X
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