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TMI Blog2023 (6) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act, as stated under Section 11BB of the Act and not from the date of reversal of credit under protest as sought by the appellant or the date of filing the revised claim as per the impugned order. The rate of interest payable would also be governed by the relevant interest rate notification issued under the Act and was prevalent at that time. This is not a case where the refund was delayed by the appellant for want of critical documents that would be necessary to quantify the refund. It was mainly because the department wanted the appellant to pay the interest amount due first, which could very well have been adjusted by the department from their refund claim as consented by the appellant - thus, as per the statutory mandate of Section 11BB of the Act the department is under a legal obligation to sanction the refund claim along with interest after the expiry of 3 months from the date of filing of the refund claim and not from the revised date of filing the claim as decided in the impugned order. The relevant date for calculating interest commences from the date of expiry of three m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have paid the interest of Rs 19,62,599/- vide challan on 15/05/2019. The adjudicating authority vide Order in Original No. 15/2019-20 (R) dated 29.8.2019 sanctioned refund amount of Rs.2,09,80,128/- being the CENVAT credit reversed under protest. However, the adjudicating authority rejected an amount of Rs.1,74,88,805/- claimed towards interest as ineligible in terms of section 11BB of the Act. Aggrieved by the said order, the appellant filed an appeal before Commissioner (Appeals) who vide the impugned order held that the appellant would be eligible for interest after a lapse of three months from 21.5.2019 i.e. the date of filing the revised refund claim. Aggrieved by the said impugned order, the appellant is before us in appeal. 3. No cross-objection has been filed by the respondent-department. 4. We have heard Shri A.P. Ravi, learned counsel and Shri B. Jeevan Kumar, Chartered Accountant for the appellant and Smt. Anandalakshmi Ganeshram, Supdt. (AR) on behalf of the respondent. 5. The learned counsel for the appellant has stated that the only issue in this appeal is relating to sanction of interest. He has stated that the stand taken by the Commissioner (Appeals) that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g from the order of a coordinate bench of Tribunal's Final Order No. A/52983/2018-EX (DB) dated 13.8.2018. The disputed dates are; 1) from the date of filing the original claim i.e. 05/10/2018 2) from the date of filing the relevant support document i.e. 14/8/2019 3) from the date of filing the revised claim i.e. 15/05/2019 or 21/05/2019 4) from the date of reversal of CENVAT credit under protest i.e. 15/04/2005 7.1 It is seen that the appellant has claimed the relevant date for calculation of interest to be from 15/04/2005 i.e. the date on which they reversed the CENVAT Credit. Extracting Section 11BB of the Central Excises and Salt Act, 1944 relevant to the matter, will help in the better understanding of the issue; "11BB. Interest on delayed refunds.--If any duty ordered to be refunded under sub-section (2) of section 11B to any applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below five per cent. and not exceeding thirty per cent. per annum as is for the time being fixed by the Central Government, by notification in the Official ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dication process where protests were vacated and duties demanded. The Hon'ble Supreme Court in a seven Judge Bench judgement in the case of Smt. Ujjam Bai Vs State of Uttar Pradesh [1962 AIR 1621/ 1963 SCR (1) 778] have held that the binding force of a decision which is arrived at by a taxing authority acting within the limits of the jurisdiction conferred upon it by law cannot be made dependent upon the question whether its decision is correct or erroneous. For, that would create an impossible situation. Therefore, though erroneous, its decision must bind the assessee. This being so the amounts paid by the appellant even under protest do not survive as a 'deposit' after the Show Cause Notices are adjudicated by the proper officer and tax liabilities determined. 7.3 The original authority has held that even the date of filing the revised claim i.e. 21/05/2019 (date of receipt in office) is not the relevant date inasmuch as the relevant support documents were only filed during the personal hearing fixed on 14.8.2019. We find that as stated in para 6.3 of the impugned order, para 3.2 Chapter 9 of the Supplementary instructions issued in terms of Rule 31 of the Central Excise Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar reads thus : "Circular No. 670/61/2002-CX, dated 1-10-2002 F. No. 268/51/2002-CX.8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Non-payment of interest in refund/rebate cases which are sanctioned beyond three months of filing - regarding I am directed to invite your attention to provisions of section 11BB of Central Excise Act, 1944 that wherever the refund/rebate claim is sanctioned beyond the prescribed period of three months of filing of the claim, the interest thereon shall be paid to the applicant at the notified rate. Board has been receiving a large number of representations from claimants to say that interest due to them on sanction of refund/rebate claims beyond a period of three months has not been granted by Central Excise formations. On perusal of the reports received from field formations on such representations, it has been observed that in majority of the cases, no reason is cited. Wherever reasons are given, these are found to be very vague and unconvincing. In one case of consequential refund, the jurisdictional Central Excise officers had taken the view that since the Tribunal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay interest is not the determination under sub-section (2) of Section 11B to refund the amount to the applicant and not to be transferred to the Consumer Welfare Fund but the relevant date is to be determined with reference to date of application laying claim to refund. The non-payment of refund to the applicant claimant within three months from the date of such application or in the case governed by proviso to Section 11BB, non-payment within three months from the date of the commencement of Section 11BB brings in the starting point of liability to pay interest, notwithstanding the date on which decision has been rendered by the competent authority as to whether the amount is to be transferred to Welfare Fund or to be paid to the applicant needs no interference." The special leave petition is dismissed. No costs." 14. At this stage, reference may be made to the decision of this Court in Shreeji Colour Chem Industries (supra), relied upon by the Delhi High Court. It is evident from a bare reading of the decision that insofar as the reckoning of the period for the purpose of payment of interest under Section 11BB of the Act is concerned, emphasis has been laid on the date of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in conformity with the view that interest arises for refund sanctioned after three months from the date of filing the refund application. 9. We find that this is not a case where the refund was delayed by the appellant for want of critical documents that would be necessary to quantify the refund. It was mainly because the department wanted the appellant to pay the interest amount due first, which could very well have been adjusted by the department from their refund claim as consented by the appellant. Hence, we find that as per the statutory mandate of Section 11BB of the Act the department is under a legal obligation to sanction the refund claim along with interest after the expiry of 3 months from the date of filing of the refund claim and not from the revised date of filing the claim as decided in the impugned order. 10. In the light of the discussions above, the impugned order is set aside. We find that the relevant date for calculating interest commences from the date of expiry of three months from the date of receipt of application for refund by the department i.e. from 05/10/2018 in terms of Section 11BB of the Central Excise Act, 1944. The appeal is disposed off accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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