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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 ..... y the department, that during the period March, 2000 to May, 2000, the respondents herein availed modvat/cenvat credit on the inputs which were also used in the manufacture/ clearance of fully exempted product without reversing an amount equivalent to 8% of the price charged by them for such exempted final products and short paid an amount of Rs. 10,91,728/- and thus contravened the provisions of erstwhile Central Excise Rules 57CC and 57AD. Accordingly a show cause notice was issued to them. Ultimately the matter was challenged by the respondents herein before the Commissioner (Appeals) who vide order dated 22.6.2007 held the demand as unsustainable and allowed the appeal in favour of the respondents herein with consequential relief, if any. During the pendency of this appeal, the respondents herein had made pre-deposit of Rs. 10,91,728/- under section 35F of Central Excise Act, 1944. 2. The appeal having been allowed in their favour with consequential relief, the respondents herein under the belief that they could take refund of pre-deposit by suo moto credit in their cenvat credit account took credit of Rs. 10,91,728/- in June, 2007 and declared the same in their ER-1 returns o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l justice. 5. Thereupon it is seen that a show cause notice dated 9.4.2012 was issued to the respondents proposing to consider afresh the very same refund application dated 11.01.2011. The grounds alleged in this show cause notice are twofold (i) That the application for refund is time barred as per section 11B of Central Excise Act, 1944 (ii) That the said amount of Rs. 10,91,728/- was under demand vide order dated 2.4.2009 and as upheld by Order-in-Appeal dated 3.11.2010 which disallowed taking suo motto credit. After adjudication of the said notice, an order dated 29.6.2012 was passed sanctioning the refund of Rs. 10,91,728/-. But the amount sanctioned was ordered to be adjusted to the demand of Rs. 10,91,728/- which was ordered to be recovered as per order dated 2.4.2009 for wrongly availing credit. It was also ordered that the respondents herein are liable to pay interest on this amount of Rs. 10,91,728/- from the date on which credit was wrongly availed till the date the same was regularized. 6. This order dated 29.6.2012 was challenged by the respondents herein by filing an appeal. The Commissioner (Appeals) vide order-in-appeal dated 23.1.2014 which is the order impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit. Alongwith this letter they furnished copy of the order dated 22.6.2007. The relevant portion of letter dated 22.2.2008 is reproduced as under: "In the light of the said order regarding acceptance of our appeal, it is requested that consequential formal orders to allow us to utilize the modvat credit of Rs. 1091728/-(Rs, Ten lac Ninety One Thousand Seven Hundred Twenty Eight Only) and for refund of the predeposit may kindly be passed at the earliest. We may add that we had approached the Superintendent Central Excise of our range for the above and that he has advised us to make a request to you directly in the matter. We may add that Central Excise Board had clarified vide their circular No.275/37/200-CC 8A dated 02.01.2002 that in such cases the pre deposits will be refunded without any application from the assessee." 11. It is seen that the department has then issued a show cause notice dated 28.5.2008 alleging wrong availment of credit. It is the case of Revenue that the respondent ought to have filed an application for refund and only after obtaining an order sanctioning refund, he would be able to get the refund. Therefore, the respondent is liable to pay interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner (Appeals) or the Appellate Tribunal (hereinafter referred to as the appellate authority), under the first proviso to section 35F, is required to be refunded consequent upon the order of the appellate authority and such amount is not refunded within three months from the date of communication of such order to the adjudicating authority, unless the operation of the order of the appellate authority is stayed by a superior court or tribunal, there shall be paid to the appellant interest at the rate specified in section 11BB after the expiry of three months from the date of communication of the order of the appellate authority, till the date of refund of such amount.". 13. To summarize, it can be said that prior to 10.5.2008, i.e. before introduction of section 35FF, the respondent was entitled to get refund of pre-deposit, as per Board circulars even without submitting an application, and was also entitled to interest for delayed refund as per the dictum laid in the case of ITC Ltd. (supra). After 10.5.2008, the new section 35FF provides that the pre-deposit, is required to be refunded consequent upon the order of the appellate authority, and such amount if not refunded within thr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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