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TMI Blog2023 (2) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... SUPREME COURT] have held that such amount deposited during investigation and /or pending litigation is ipso facto pre-deposit and interest is payable on such amount to the assessee being successful in appeal, from the date of deposit till the date of refund. In the case of COMMISSIONER OF CENTRAL EXCISE, PANCHKULA VERSUS M/S RIBA TEXTILES LIMITED [ 2022 (3) TMI 693 - PUNJAB HARYANA HIGH COURT] the Hon ble Punjab Haryana High Court observed that Section 142 of the Act when read with Section 2(48) of the Act is a complete answer to the plea raised by the appellant qua the issue of jurisdiction. The provision explicitly provides that every claim of refund shall be dealt under the existing law i.e. Central Excise Act, 1944 and not by the provisions of the Act. Thus the plea of transfer of jurisdiction due to GST regime is not available to the appellant. It is settled that the appellant are entitled for the interest on refund of pre-deposit amount @6% from the date of deposit till the date of refund. Appeal allowed - decided in favour of appellant. - EXCISE Appeal No. 10828 of 2021-SM with EXCISE Appeal No. 10957 of 2021-SM - A/10235-10236/2023 - Dated:- 7-2-2023 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Sections 214 and 244 of the Act as held by the various High Courts and also of this Court. In the instant case, the appellant's money had been unjustifiably withheld by the Department for 17 years without any rhyme or reason. The interest was paid only at the instance and the intervention of this Court in Civil Appeal No. 1887 of 1992, dated 30-4-1997. Interest on delayed payment of refund was not paid to the appellant on 27-3-1981 and 30-4-1986 due to the erroneous view that had been taken by the officials of the respondents. Interest on refund was granted to the appellant after a substantial lapse of time and hence it should be entitled to compensation for this period of delay. The High Court has failed to appreciate that while charging interest from the assessee, the Department first adjusts the amount paid towards interest so that the principal amount of tax payable remain outstanding and they are entitled to charge interest till the entire outstanding is paid. But when it comes to granting of interest on refund of taxes, the refunds are first adjusted towards the taxes and then the balance towards interest. Hence as per the stand that the Department takes they are liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stood and on the peculiar facts and circumstances of each case. When a specific provision has been made under the statute, such provision has to govern the field. Therefore, the Court has to take all relevant factors into consideration while awarding the rate of interest on the compensation. 48. This is the fit and proper case in which action should be initiated against all the officers concerned who were all in charge of this case at the appropriate and relevant point of time and because of whose inaction the appellant was made to suffer both financially and mentally, even though the amount was liable to be refunded in the year 1986 and even prior to. A copy of this judgment will be forwarded to the Hon ble Minister for Finance for his perusal and further appropriate action against the erring officials on whose lethargic and adamant attitude the Department has to suffer financially. By allowing this appeal, the Income-tax 49. Department would have to pay a huge sum of money by way of compensation at the rate specified in the Act, varying from 12% to 15% which would be on the high side. Though, we hold that the Department is solely responsible for the delayed pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N No. DL-I/ST/R-IV/RIP/ Emaar/MGF/08 5-2-2010 4,69,400/- 1-10-2008 to 31-3-2009 2. SCN No. DL-I/ST/R-IV/RIP/ Emaar/MGF/08 27-9-2010 11,78,499/- 1-4-2009 to 31-3-2010 3. SCN No. DL-I/ST/R-IV/RIP/ Emaar/MGF/08 19-10-2011 36,83,365/- 1-4-2010 to 31-3-2011 4. SCN No. DL-I/ST/R-IV/RIP/ Emaar/MGF/08 18-9-2012 50,19,861/- 1-4-2011 to 31-3-2012 5. SCN No. DL-I/ST/R-IV/RIP/ Emaar/MGF/08 8-5-2014 25,62,001/- 1-4-2012 to 30-6-2012 4 . The aforementioned show cause notices were adjudicated vide order-in-original dated 27-8-2019, whereas the respondent-assessee was successful (demand dropped). The respondent filed refund claim on 9-10-2019 praying for refund of Rs. 2,47,32,326/- being the amount deposited by them with respect to the aforementioned show cause notices, which was deposited by the respondent vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Sandvik Asia Ltd. - 2006 (196) E.L.T. 257 (S.C.) = 2007 (8) S.T.R. 193 (S.C.) have held that such amount deposited during investigation and/or pending litigation is ipso facto pre-deposit and interest is payable on such amount to the assessee being successful in appeal, from the date of deposit till the date of refund. 8 . Considering the rival contentions, this appeal by the Revenue is dismissed. Further, it is directed that the Adjudicating Authority shall disburse the amount of interest @ 12% per annum forthwith, within a period of 45 days from the date of receipt of the copy of this order, as held by Division Bench of this Tribunal in Parle Agro (P) Ltd., (supra). 9 . Thus, the appeal by Revenue is dismissed with directions as above. (c) In the case of Hawkins Cookers Limited (supra), Chandigarh Bench of this Tribunal passed the following decision : 6. The short issue in hand is before me that : Issue No. 1 Whether the assessee is required to file the application for refund claim in consequent to the order of the Hon ble Apex Court dated 11-12-1996 or not? Issue No. 2 Whether the amount paid by the assessee under Section 35N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest demanded or penalty levied. Section 129E of the Act falls under Chapter XV under the heading Appeals. Chapter XV of the Act is comprised of various provisions from Section 128 to Section 131C of the Act. Section 130 of the Act which provides for appeal to High Court and Section 130E of the Act which provides for appeal in Supreme Court also fall under Chapter XV. Thus, an appeal before the Supreme Court would also be an appeal under the said Chapter as envisaged under Section 129E of the Act. Thus, any amount deposited during the pendency of an appeal before the High Court or the Supreme Court would also be by way of deposit under Section 129E of the Act and has to be treated accordingly. 11 . On going through the order of the Hon ble High Court of Gujarat, I find that the Hon ble High Court has held that any amount of pre-deposit during the pendency of the appeal is a amount of pre-deposit and the same is to be treated accordingly, therefore, I hold that the amount of pre-deposit paid by the assessee under Section 35N is equivalent to the amount paid under Section 35F of the Act and the same is to be treated as pre-deposit accordingly. Moreover, in the adjudication ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as whether the pre-deposit made as pre-condition for the hearing of appeal under the Central Excise Act, 1944 was, on the assessee being ultimately successful, refundable to the assessee with interest as there was no provision in the Central Excise Act for payment of interest on such refund. It is in the course of hearing before the Supreme Court that the Learned Solicitor General after taking instructions made a statement that the Central Board of Excise and Customs proposes to issue a circular in connection with the payment of interest on all such pre-deposits. At the time a draft copy of the proposed circular was handed over to the Supreme Court there was no rate of interest specified in the proposal and, therefore, the Supreme Court awarded interest @ 12% per annum. Therefore, when this Court directed the respondent to pay interest to the appellant in terms of the Circular Bearing No. 802/35/204-CX., dated 8-12-2004 on the pre-deposit of the delayed refund within two months from today it has to be constructed that this court meant the rate of interest which was awarded by the Supreme Court in the case of Commissioner of Central Excise v. ITC Limited which was the rate quantifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondents, what should be the rate of interest for which the respondents should be held liable. 18. The Counsel for the respondents states that as per the statute, the respondents are liable for interest @ 6% per annum only. 19 . Per contra, the Counsel for the petitioner has drawn attention to : (A) Sandvik Asia Ltd. v. Commissioner of Income Tax-I, Pune, (2006) 2 SCC 508 = 2006 (196) E.L.T. 257 (S.C.) where interest @ 9% per annum was awarded; (B) Surinder Singh v. Union of India, 2006 SCC OnLine Del 1863 (DB) = 2006 (204) E.L.T. 534 (Del.) where interest @ 12% per annum was granted on delayed refund; (C) Hello Minerals Water (P) Ltd. v. Union of India, 2004 SCC OnLine All 2187 (DB) = 2004 (174) E.L.T. 422 (All.) where interest @ 10% per annum was granted; (D) Hindustan Coca-Cola Beverages Pvt. Ltd. v. Union of India, 2013 SCC OnLine Guj 1487 (DB) = 2015 (324) E.L.T. 299 (Guj.) where interest @ 9% per annum and future interest @ 6% per annum was granted; and, (E) Ebiz.com Pvt. Ltd. v. Commissioner of Central Excise, Customs S.T., 2017 (49) S.T.R. 389 (All.) where costs of Rs. 50,000/- were imposed on the Department. 20 . In the present case, as afores ..... X X X X Extracts X X X X X X X X Extracts X X X X
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