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TMI Blog2019 (11) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... 28-11-2019 - Mr. Ashok Jindal, Member (Judicial) Present for the Appellant: Shri P.k.Mittal,, Advocate Present for the Respondent: Shri H.S.Brar, AR ORDER The appellants are in appeal against the impugned orders wherein the interest on delayed refund i.e. from the date of deposit till payment thereof has been rejected by the authorities below. 2. The facts of the case are that an investigation was conducted against the appellants. Except M/s.Marshall Auto Industries Limited, all other appellants have made certain deposits during the course of investigation and M/s.Marshall Auto Industries had deposited ₹ 3,50,000/- in terms of Stay Order No.8.6.2009. After investigation, the show caused notices were issued and to deny the credit on the materials purchased by the appellants. The matters were adjudicated, the credit was denied. The said order was challenged before this Tribunal and this Tribunal remanded the back to the adjudicating authority for fresh adjudication. Again the matter was adjudicated by the adjudicating authority and the credit was denied and the ordered for recovery of the same. The said order was again c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (v) Xerox India Ltd vs. AsstCommr, Deptt of Trade Taxes, Govt of NCT.- 2019* (20) GSTL 348 (Del) (vi) Ratnamai Metals Tubes Ltd. vs. CCE ST Ahmedabad-III 2019 (366) ELT 139 (Tri. Ahmd.) (vii) CCE Kutch (Gandhidham) vs. Deep Construction co. 2019 (365) ELT 532 (Tri. Ahmd.). 6. Heard the parties and considered the submission. 7. I find that after hearing the parties, the issue arose whether the appellants are entitled to claim @ 12@ of the deposit made during the period of investigation or as per the direction of the Tribunal while entertaining their appeal till its realization or not? 8. The said issue has been examined by this Tribunal in the case of Tribunal in the case M/s. Fujikawa Power and other vs. CCE, Chandigarh-I vide Final Order No.61041-61042/2019 dt.26.11.2019 wherein this Tribunal has observed as under:- 11. The contention of the Ld.AR is that in terms of Section 35FF of the Central Excise Act, 1944, the interest on delayed refund is to be paid after 3 months from the date of communication of the order. When specific statute has been made, therefore, the decision in the case of Sandvik Asia Limited (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormed an opinion that Section 35C of the Income-tax Act, 1961, was designed to encourage development of agriculture and, therefore, gave a weighted deduction in respect of expenditure incurred in providing to the agriculturists services and facilities specified therein. The term agricultural product or product of agriculture is required to be construed liberally so as to include not merely the primary product as it actually grows, but also a product which undergoes a simple operation so as to make it more saleable or more usable. The rice and the husk though separated remain as they were produced and hence continued to be agricultural product or product of agriculture . 30 . As the Hon ble Apex Court has held that conversion of paddy into rice is not a distinct operation and the rice and husk remain in their natural form as a result of dehusking and are covered by the term 'agricultural product . 31 . Therefore, we hold that the test of manufacture has been failed as the goods are not manufactured goods as per Section 2(f) of Central Excise Act, accordingly, the question of excisability does not arise. Therefore, the Issue No. 1 is answered in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art, the period of the delay attributable to him shall be excluded from the period for which interest is payable. 16. Section 35FF of the Central Excise Act, 1944 deals with the situation in hand, the same is extracted below:- Section 35FF. Interest on delayed refund of amount deposited under the proviso to Section 35F- Where an amount deposited by the appellant in pursuance of an order passed by the Commissioner (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. 17. On-going through the provisions of both Income Tax Act, 1961 and Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set out above in the instant case for the assessment year 1978-79, it has been deprived of an amount of ₹ 40 lakhs for no fault of its own and exclusively because of the admittedly unlawful actions of the Income Tax Department for periods ranging up to 17 years without any compensation whatsoever from the Department. Such actions and consequences, in our opinion, seriously affected the administration of justice and the rule of law. COMPENSATION: 46. The word Compensation has been defined in P.RamanathaAiyar s Advanced Law Lexicon 3rd Edition 2005 page 918 as follows: An act which a Court orders to be done, or money which a Court orders to be paid, by a person whose acts or omissions have caused loss or injury to another in order that thereby the person damnified may receive equal value for his loss, or be made whole in respect of his injury; the consideration or price of a privilege purchased; some thing given or obtained as an equivalent; the rendering of an equivalent in value or amount; an equivalent given for property taken or for an injury done to another; the giving back an equivalent in either money which is but the measure of value, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r more than two decades. We, therefore, direct the respondents herein to pay the interest on ₹ 40,84,906 (rounded ofto ₹ 40,84,900) simple interest @ 9% p.a. from 31.03.1986 to 27.03.1998 within one month from today failing which the Department shall pay the penal interest @ 15% p.a. for the above said period. 18. As the Hon ble Apex Court has answered the issue holding that the assessee is entitled to claim interest from the date of payment of initial amount till the date its refund. Therefore, I hold that the appellants are entitled to claim the interest on delayed refund from the date of deposit till its realization. 19. Further, the interest on the refund shall be payable @ 12% per annum as held by Hon ble Kerala High Court in the case of Sony Pictures Networks India Pvt.Ltd.-2017 (353) ELT 179 (Ker.) wherein it has held as under:- 14 . Now, the sole question remains to be considered is what is the nature of interest that the petitioner is entitled to get. As discussed above in the judgment Commissioner of Central Excise v. ITC (supra), the Apex Court confined the interest to 12% and further held that any judgment/decision of any High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellants against the order of the Tribunal rejecting the appeal for failure to make the pre-deposit. This SCA was dismissed in September 2004 and SLP was filed in the Hon ble Supreme Court in October 2004. In July 2005, the Hon ble Supreme Court ordered that if the amount directed to be deposited by the Tribunal is deposited, the appeals before the Tribunal has to be restored and decided on merits. In these circumstances, the amount deposited by the appellant is to be treated as pre-deposit since the matter had not attained finality during the relevant period. Therefore, refund is to be treated as refund of pre-deposit made when the appeal was pending. There is no dispute that the amounts deposited is duty but this is not the issue which has been taken into account while precedent decisions have allowed the interest at 12% on the refunds claimed in respect of pre deposit. I find that in the decisions cited by the learned advocate, interest at 12% has been allowed. Therefore, following the judicial discipline, I consider it appropriate that interest in this case also is to be allowed @ 12%. Accordingly, original adjudicating authority is directed to workout the differential ..... X X X X Extracts X X X X X X X X Extracts X X X X
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