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TMI Blog2020 (2) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... s seeking the interest on the delay refunds. 2. The facts of the case are that an investigation was conducted against the appellant by DGCEI in the year of 2000 and at that time on 18.01.2000, the appellant paid ₹ 4 lakhs and thereafter as per the direction of this Tribunal while entertaining the stay application, again, ₹ 50 lakhs was paid by the appellant during the period 08.12.2007 to 29.02.2008. Finally, the matter was decided in favour of the appellant in the year of 2015. Thereafter, the appellant claimed the refunds on the amounts paid during the course of investigation and at the time of entertaining the stay application. The said refund claims were sanctioned to the appellant on 02.06.2017, but the adjudicating authority did not consider the claim of interest of the appellant from the date of deposit till its realization. Against the said order, the appellant is before me. 3. The learned Counsel for the appellant submits that the issue has been settled by this Tribunal in the case of M/s Marshall Foundry Engg. Pvt. Ltd. vs. Commr of CGST, Faridabad others vide Final Order No. 61058-61062/2019 dt. 28.11.2019 and Corrigendum issued on dt. 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d within the period of three months aforesaid is attributable to the assessee, whether wholly or in part, 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to that as has happened in the instant case. It is a case of the appellant as 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 bac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 1982-83. Already the matter was pending for 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the SCA filed 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 workou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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