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TMI Blog2023 (12) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the decisions with respect to the rate of interest. The appellant is entitled to receive interest at the rate of 12%. Though the department has impressed upon that the demand with respect to Rs.16,00,60,335/- has been remanded for de novo adjudication but apparently and admittedly as on date the said demand also stands set aside vide the final order of this Tribunal dated 20.10.2017 [ 2017 (12) TMI 7 - CESTAT NEW DELHI ]. The appellant is held entitled to have interest on the amount of refund sanctioned at the rate of 12% per annum from the date of the deposit of the amount till the date of refund thereof. Except that for an amount of Rs.13,50,500/- which was deposited during investigation but towards the duty liability that too from the Cenvat account. The appellant shall be entitled for the interest on the said amount from the date of the final order of the Tribunal dated 20.10.2017 (vide which the duty demand was set aside) till the date of payment thereof - Appeal allowed. - DR. RACHNA GUPTA, MEMBER (JUDICIAL) AND MRS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Ms. Sukriti Das, Advocate for the Appellant Shri Rakesh Agarwal, Authorized Representative for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in Para 44 of the aforesaid final order. Pursuant to the said final order, the appellants filed refund claims on 21.12.2017 for the amount as was deposited by the appellant and for the cash amount as was seized during searches. The refund claim was sanctioned vide Order-in-Original No. 19/2017 dated 13.02.2018, however without any interest. Being aggrieved the said order was challenged. The appeal has been rejected vide the impugned Order-in-Appeal No. 279 to 282/2019 dated 15.10.2019 holding that the amount in question is treated as pre deposit under Section 35F of the Act. Hence it shall attract payment of interest on the refund amount after expiry of three months from the date of communication of order of the appellate authority till the date of refund for such amount. Being aggrieved the appellant is before this Tribunal. 2. We have heard Ms. Sukriti Das, learned Advocate for the appellant and Shri Rakesh Agarwal, learned Authorized Representative for the department. 3. Learned counsel for the appellant has mentioned that the refund claim of the appellant has been sanctioned but the entitlement of interest on the said amount has been declined for the reason tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontinental Engines Ltd. Vs. Commissioner (Appeals), Central Excise CGST, Jaipur I reported as 2022 (5) TMI 903 CESTAT NEW DELHI (vi) Vikas Sabharwal, Proprietor Vs. Commissioner of Central Tax GST, NEW DELHI reported as 2023 (4) TMI 5 CESTAT NEW DELHI (vii) Prem Jain Ispat Udyog Pvt. Ltd. Vs. Commissioner of Central Goods and Service Tax, Excise Customs, Udaipur reported as 2022 (5) TMI 645 CESTAT NEW DELHI Accordingly, the order under challenge is prayed to be set aside and appeals are prayed to be allowed. 4. Learned DR while rebutting the above submissions has mentioned that there is no provision in law for the grant of interest except Section 11B and 35FF of the Central Excise Act. No statutory provision has been mentioned by the appellant to claim the rate of interest at the rate of 12%. The appeals are not maintainable for want of the said explanation. It is further submitted that with respect to the amount of duty of Rs.16,00,60,335/-, the matter is still sub judice being remanded back to the Commissioner. Also, once it is held to be an amount of pre deposit, the interest is payable under Section 35FF only after three months of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded under sub-section (2) of Section 11B is not refunded within three months from the date of receipt of the application then the applicant shall be entitled to interest after the expiry of three months from the date of receipt of the application at such rate not below 5% and not exceeding 30% as may be notified by the Central Government in the Official Gazette. (c) Perusal of Section 11DD provides that where an amount has been collected in excess of duty from the buyer of such goods, the person who is liable to pay such amount shall, in addition to the amount, be liable to pay interest at such rate not below 10% and not exceeding 36% per annum as is for the time being fixed by the Central Excise, by notification in the Official Gazette. (d) Section 35FF of Central Excise Act also talks about the interest on delayed refund of amount deposited under Section 35F. According to this section where the amount deposited under Section 35F i.e. the amount of pre-deposit is required to be refunded consequent to the order of appellate authority, there shall be paid to the appellant interest at such rate, not below 5% and not exceeding 36% per annum as is for the time being fixed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount of seized currency in the impugned refund claim was not a deposit towards duty. We observe from the order under challenge that the entire amount in question is held to be an amount of pre deposit and Commissioner (Appeals) has gone a step ahead of original adjudicating authority by holding that present is not the case of unjust enrichment. The amount of cash seized is an amount of revenue deposit as has been held by this Tribunal in the case of Matta Paints (supra). The amount deposited pursuant to the court order as a condition for the grant of stay or bail, though in strict sense is not a pre deposit but it is akin to the one as it has been held by Hon ble High Court of Madras in the case of Kaleesuwari Refinery Pvt. Ltd. Vs. Assistant Commissioner of Central Excise, Chennai, reported as 2016 (341) E.L.T 584 (Mad.). This Tribunal also in another earlier decision in the case of Ghaziabad Ship Breakers Pvt Ltd Vs. Commissioner of Customs, Jamnagar, reported as 2010 (260) E.L.T 274 (Tri. Ahmd.) has held that any amount deposited pursuant to the court orders has to be treated as the amount of pre deposit. Law with respect to the amount deposited during investigation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e department to pay the interest has referred to Departments' own circular dated 02.01.2002 wherein the Board clarified that the matters of refund other than the amount of duty would not be covered under the provisions of Section 11B of Customs Act or Section 35FF of Central Excise Act. It was held by the Hon'ble Apex Court that in such cases of refund even the concept of unjust enrichment is not applicable. Learned Apex Court has relied upon its decision in SLP titled as Union of India vs Suvidhe Ltd. in which decision of Bombay High Court in Suvidhe Ltd. vs Union of India reported as 1996 (82) ELT 177 has been upheld. The Bombay High Court has observed that in case of deposits which were not in the form of duty, provisions of 11B of Customs Act will have no applicability. The deposits made under Section 35FF since is not the payment of duty, Section 11B will not be applicable. 5.7 Another circular of department bearing No. 802/35/2004 CX dated 08.12.2004 was also being considered by the Apex Court in the above mentioned judgment dated 08.04 2015. In that circular the Board emphasised that the amounts other than the amount of duty if deposited it should be refunded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terated that refund of pre-deposit made should not be withheld on the ground that Department is proposing to file an appeal or has filed an appeal against the order granting relief to the party. Jurisdictional Commissioner should ensure that refund of deposit made for hearing the appeal should be paid within the stipulated time of 15 days as per para 5.2 supra. 7. Procedure for refund: 7.1 A simple letter from the person who has made such deposit, requesting for return of the said amount, along with a self attested Xerox copy of the order in appeal or the CESTAT order consequent to which the deposit becomes returnable and attested Xerox copy of the document evidencing payment of such deposit, addressed to Jurisdictional Assistant/Deputy Commissioner of Central Excise and Service Tax or the Assistant/Deputy Commissioner of Customs, as the case may be, would suffice for refund of the amount deposited along with interest at the rate specified. 7.2 Record of deposits made under Section 35F of the Central Excise Act, 1944 or section 129E of the Customs Act, 1962 should be maintained by the Commissionerate so as to facilitate seamless verification of the deposits at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to in paragraph (supra) would clearly go to show that the appellant was undisputably entitled to interest under 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 30.04.1997. Interest on delayed payment of refund was not paid to the appellant on 27.03.1981 and 30.04.1986 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 assesses, the Department first adjusts the amount paid towards interest so that the principle 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 towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court thus held that the assessee is entitled to claim interest from the date of payment of initial amount till the date its refund. 5.10 Following the said law of land, we hold that the appellants are entitled to claim the interest on the amount as has been refunded in their favour that too to be paid from the date of payment of initial amount till the date of its refund. 5.11 Now comes the question about the rate at which the such interest has to be awarded. From the several provisions of Central Excise Act, as quoted above, it is observed that the rate of interest has to be notified by the Central Government from time to time. We take note of following notifications: (i) The Notification No. 15/2016-CE dated 01.03.2016 issued under Section 11AA of Central Excise Act vide which the Central Government has fixed the rate of interest at 15% per annum for the purpose of said section. (ii) The Notification No. 67/2003-CE dated 12.09.2003 issued under Section 11BB vide which the Central Government has fixed the rate of interest at 6% per annum for the purpose of said section. (iii) The Notification No. 68/2003-CE dated 12.09.2003 issued under Section 11DD vide which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exceeding thirty-six per cent per annum as is for the time being fixed by the Central Government, by notification in the Official Gazette, on such amount from the date of payment of the amount till, the date of refund of such amount. Provided that the amount deposited under section 35F, prior to the commencement of the Finance (No. 2) Act, 2014, shall continue to be governed by the provisions of Section 35FF as it stood before the commencement of the said Act. The bare perusal makes it clear that the proviso is applicable to such amounts which were deposited under Section 35F. 6. From the entire above discussion, it is clear that the amount in question was not deposited under Section 35F, however is akin to predeposit for the reasons as discussed above. Resultantly, we hold that the said proviso is not applicable to the given set of circumstances. Irrespective that the amount in question except for Rs.3,11,00,000/- was deposited prior 06.01.2014. We therefore hold that the findings are liable to be set aside. Section 35FF itself prescribes the rate of interest in the range of 5% to 36% when these provisions is read in the light of the above provisions and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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