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TMI Blog2018 (1) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... banki. Till 25.07.1991, the appellant was operating under the set-off scheme, in terms of Notification No.225/86 dated 03.04.1986, which provided that the duty paid on Mono Ethylene Glycol (input) would be set off against the duty payable on PSF (final product). After introduction of Modvat Scheme, the appellant had vide letter dated 19.12.1996 sought refund of the unutilized set-off duty to the tune of Rs. 80,73,405/- lying in its RG 23 Account, by way of transfer to its RG-23A (Modvat Account). The said refund was claimed by way of transfer in terms of Rule 57H(3) of the Central Excies Rules. Vide letter dated 21.06.2001 it was intimated to the appellant that transfer of credit would be considered at a later stage therefore set off amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lastics Ltd. v. Union of India [2006 (205) ELT 12 (MP)], Ebiz.com Pvt.Ltd. v. CCE [2017 (459) STR 389 (All) and Hindustan Coca-Cola Beverages Pvt.Ltd. v. UOI [2015 (324) ELT 299 (Guj.)]. Therefore he prayed for impugned order be set aside and appeal be allowed with consequential relief. 4. On the other hand ld.AR reiterated the findings of the impugned order and submits that the appellant was allowed transfer of credit of set off amount in their Modvat account and same has been coming out from the impugned order. Therefore no interest is payable to the appellant. 5. Heard both sides. Considered the submissions. 6. We find that in this case the sole ground for denial of interest on delayed refund/transfer of credit to Modvat account is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Rules, 1944 or not. We find that similar issue came up before Hon'ble High Court of Madhya Pradesh in the case of Midland Plastics Ltd. (supra) wherein the Hon'ble High Court has observed as under:- "11. It is the case of the respondents that in matters pertaining to grant of allowance of Modvat credit under Rule 57 there is no provision for grant of interest under the entire Central Excise Law and the provisions of Section 11BB cannot be made applicable in such matters. Accordingly, on these counts respondents have resisted the claim made by the petitioner. ..................... ..................... ..................... "15. Section 11BB of the Central Excise Act, 1944 with regard to interest on delayed payment wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m a complete reading of the aforesaid judgment it is clear that it is held in the aforesaid judgment that the provisions of Rule 57H and the notification issued thereunder enable refund under the Modvat credit scheme but even in such cases the procedure and limitation for claiming such refund would be governed by the provisions of Section 11B of the Central Excise Act. That being so, the arguments advanced on behalf of the department to be contrary has to be rejected and it has to be held that with effect from the date the provisions of Section 11BB came into force petitioner was entitled to interest on the amount due in accordance with the notification issued by the department. Accordingly, with effect from 26-8-1995 till the date of settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to consider the claim for interest. But since the amount was withheld wholly without any justification, their stand is that no interest can be paid. The Court finds that on merger, the unutilized credit lying with the amalgamating company gets transferred to the amalgamated company automatically by virtue of Rules 57F(20) and 57S(5) of the Central Excise Rules, 1944. Therefore, it is not a case where the petitioner is to be granted refund by virtue of the order of an appellate authority but it is a case where an amount to which the petitioner was rightfully entitled under the provisions of law was retained without any rationale or reasoning acceptable in law. This Court is thus of the opinion that withholding the transfer of credit on m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Ebiz.com Pvt.Ltd. (supra), wherein the Hon'ble High Court relying on the decision of the Hon'ble Gujarat High Court in the case of Hindustan Coca-Cola Beverages Pvt.Ltd. held that any amount received by the Revenue as deposit or pre-deposit i.e. unauthorizedly or under mistaken notion, etc., cannot be retained by Revenue since it has no authority in law to retain such amount and it must be refunded with interest. Therefore, following the precedent decisions of the Hon'ble High Court as discussed hereinabove we hold that refund of set off was not given by way of credit in the Modvat account and delay has been occurred on account of the Revenue. In that circumstances for intervening period, the appellant is entitled to claim interes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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