The Customs, Excise & Service Tax Appellate Tribunal, New Delhi allowed the interest @ 6% p.a. on delayed payment of excise duty refund.
The bench relied on the case of C. Padmini Chinnadurai, in which the Division Bench rejected the contention of the appellant that since it is “pre-deposit” and not “central excise duty”, therefore, the notification no.67/2023 would not apply.
It was further observed by the tribunal that the Karnataka High Court in Commissioner of Central Excise, Bangalore Vs. Hindustan Granites considered the said notification, which was issued in exercise of the powers conferred by Section 11BB of CEA fixing the rate of interest @6% p.a. for the purpose of said section and holding that interest payable in terms of Section 11BB of the Act, which in turn is with reference to the notification referred above, the rate of interest was reduced from 9% to 6%.
The tribunal also referred to the order of the Delhi High Court in the case of Commissioner of Customs Vs. M/s. D.D. International Pvt. Ltd., where the notification issued in exercise of the powers under Section 129EE of the Customs Act, 1962 was in issue and the Division Bench, directed that the interest shall be computed and paid @ 6%p.a. in terms of the notification dated 12.08.2014 issued by the Union Government prescribing the interest on refund to be fixed @ 6% p.a.
The bench stated that Section 11BB specifies that interest shall be paid to the applicant at such rate not below 5% and not exceeding 30% p.a., which may be fixed by the Central Government by issuing the notification on such duty and, therefore, the notification no.67/2003 has been issued fixing the interest @ 6% p.a. on the delayed payment of refund and hence, the same has been rightly allowed to the appellant. Merely because the appellant has claimed interest @12% mis-interpreting the earlier decisions, does not entitle him to the said rate.
Facts
The appellant is engaged in the manufacture of Pan Masala and Gutkha. The refund application was filed by the appellant claiming refund of central excise duty paid under compounded levy scheme on the goods, which were exported and hence were entitled for rebate of duty paid on the goods exported by them. Both the Competent Authority and the Appellate Authority rejected the refund claims, which were then challenged by the appellant. The Tribunal vide order remanded the matter as the same was squarely covered by the earlier order of the Tribunal in the case of the assessee itself.
Consequently, the Competent Authority allowed the refund application vide order. However, no interest was allowed on the said amount, as according to the Revenue, the refund was sanctioned within the period of 3 months from the date of filing the refund application. The appellant claimed the interest on the original amount of refund for the period from 01.11.2009 to 05.09.2017 i.e. after 3 months from the date of application for claiming the refund was submitted, relying on the decision of the Supreme Court in the case of Ranbaxy Laboratories Ltd. Vs. Union of India.
The Adjudicating Authority vide order-in-original rejected the refund claim of interest, after issuance of the show cause notice to the appellant. The appeal filed by the appellant was rejected by the Commissioner (Appeals) by the order.
Submissions
Counsel for the appellant relying on the decisions of the Supreme Court in the case of CCE Vs. I.T.C. Ltd. and of the Allahabad High Court in the case of M/s.Govind Mills Ltd. Vs. CCE, Allahabad claimed the interest @12% for the delayed payment.
Counsel for the appellant submitted that the amount in question was revenue deposit and not duty and, therefore, provisions of Section 11BB would not apply.
Authorised Representative for the respondent reiterated the findings of the Authorities below and relying on the provisions of the Notification No.67/2003-CE (N.T.) issued under Section 11BB, which restricted the rate of the interest @6% in case of delayed refund.
Conclusion
The tribunal held that the contention of the appellant that the order has been passed beyond the scope of the show cause notice is not sustainable as the same has been passed in consonance with the notification, which has been validly issued under the provisions of Section 11BB of the Act.
The bench dismissed the appeals.
Case Details
Case Name: M/s.Dinesh Tobacco Industries v/s Commissioner of Central Goods and Service Tax, Customs and Central Excise, Jodhpur
Citation: Excise Appeal No.50455 of 2019 with Excise Miscellaneous Application No.50455 of 2024
Judges: Ms. Binu Tamta, Member (Judicial) And Mr. P.V.Subba Rao, Member (Technical)
DATE OF DECISION: 09.08.2024