Cce-Ludhiana vs Ltd. Faridkot

[Arising out of Order-in-appeal no. 305/CE/CHD/2006 dated 21.04.2006 passed by CCE-Chandiagarh]

1. Whether Press Reporter may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of the order?

4. Whether order is to be circulated to the Department Authorities?

CCE-Ludhiana Appellant

Vs.

M/s. Faridkot Co-op Sugar Mills

Ltd. Faridkot Respondent

Appearance: Shri R.K. Grover, DR for the appellant.

Shri Vikrant Kackria, Advocate, for the respondent.

Coram: Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri S.K. Mohanty, Member (Judicial)

Final Order No. 51600/2015

Per: Rakesh Kumar

The respondent are engaged in manufacture of sugar chargeable to Central Excise Duty. In the course of audit of their Central Excise records by the Internal Audit Team of the Central Excise-Meerut, an objection was raised that the respondent are liable to pay duty of Rs. 2,34,154 on the amount of Rs. 10,12,000/- received by them as liquidated damages. In pursuance of the Internal Audit objection raised in course of the Audit conducted from 22/6/2000 to 23/6/2000, the Jurisdictional Range Officer directed the respondent to pay the duty of Rs. 2,34,154/- and accordingly, the respondent paid this amount vide PLA debit entry no. 52 dated 21/7/2000. Subsequently, the respondent filed a refund claim of this amount with the Jurisdictional Assistant Commissioner on 18/01/2001 on the ground that the Audits view was wrong and that they are not required to pay the duty on the liquidated damage of Rs. 10,12,000/- received by them. The Assistant Commissioner after issue of show cause notice rejected the refund claim holding that the duty was payable by them and has been correctly paid by them. On appeal to Commissioner (appeals), against this order of the Assistant Commissioner, the Commissioner (appeals), dismissed the appeal.

2. The respondent, thereafter, filed an appeal before the Tribunal and the Tribunal vide final order no. 447/NB (A) dated 17/5/2004 set aside the Commissioner (appeals)s order holding that no duty was payable by the respondent on the liquidated damages. In pursuance of the Tribunals order, the respondent filed a refund claim on 21/6/2004 which was paid by the Assistant Commissioner vide order dated 18/8/2004. However, the Assistant Commissioner did not sanction the interest. The appellant, thereafter, filed an application to the Assistant Commissioner for payment of interest on the refund for the period of delay in terms of the Provision of section 11BB. The Assistant Commissioner vide letter dated 20.06.2005 declined the request for interest on the ground that the refund claim had been filed on 21/6/2004 and the same was sanctioned and paid within 3 months, i.e., on 18/08/2004. This order of the Assistant Commissioner was set aside reserved by the Commissioner (appeals) vide order-in-appeal dated 21/4/2006 against which the Revenue is in appeal.

3. Heard both the sides.

4. Shr. R.K. Grover, ld. DR, assailed the impugned order by reiterating the grounds of appeal and pleaded that since in this case, the refund had become due on the basis of the Tribunals final order dated 17/05/2004, the interest on delayed refund is to be paid from the date of expiry of three months from the date of the receipt of the final order of the Tribunal, till the date of the payment and in this regard he relies upon the Tribunals judgment in the case of Indian Thermoplastics (P) Ltd. Vs. Commissioner of Customs, Kolkata reported in 2004 (164) ELT 156 (Tri-Lb); that in this case, the date of 18/01/2001 cannot be treated as the date of filing of refund claim, as that refund claim had been rejected by the Assistant Commissioner. He also cited the judgment of the Tribunal in the case of Shreeji Colourchem Industries Vs. Commissioner of C.EX., Vadodara-I reported in 2008 (232) ELT 65 (Tri-Ahmd.) wherein it was held that there cannot be any claim for refund in absence of filing refund claim as per statute. He, therefore, pleaded that the impugned order is not correct.

5. Shri Vikrant Kackria, Advocate, ld. Counsel for the respondent, pleaded that it is not disputed by the department that the respondent had paid the duty of Rs. 2,34,154/- on 21/7/2000, in pursuance of the directions of the concerned range office based on the Internal Audit objection, raised by the Audit party, that the refund claim for the refund of this amount had been filed to the Assistant Commissioner on 18/01/2001; that when the refund claim has been filed on 18/01/2001, the interest would be payable from the date of expiry of three months from the date of filing of the refund claim; that in this regard, the relies upon the judgment of the Apex Court in the case of Ranbaxy Laboratories Limited Vs. Union of India reported in 2011 (273) ELT 3 SC; that in para 13 of this judgment, the Apex Court has observed that the close reading of the section 11BB, which now governs the question relating to payment of interest on belated payment of refund, makes it clear that the relevant date for the purpose of determining the liability to 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 Consumer Welfare Refund, but the relevant date is to be determined with reference to the date of application laying the claim to be refunded and 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 not payment within 3 months from the date of commencement of under section 11BB brings in the starting point of liability to pay interest, notwithstanding the date on which the decision has been rendered by the competent authority as to whether the amount is to be transferred to welfare fund or is to be paid to the applicant; that in this case, the refund had been filed on 18/01/2001 and after the Tribunals final order dated 17/5/2004 only a reminder had been issued on 21/6/2004 and that reminded cannot be treated as refund claim and that in view of this, there is no infirmity in the impugned order.

6. We have considered the submissions from both the sides and perused the records.

7. In this case as stated in the memorandum of appeal filed by the Revenue, the duty amount of Rs. 2,34,154/- had been paid by the respondent on 21/7/2000 as directed by the Central Excise Range Officer Moga on the basis of an Internal Audit objection no. 28 which was raised during the course of Audit of the respondent Central Excise Records during period from 22/6/2000 to 23/06/2000 and the refund claim was filed for the first time on 18/01/2001. This refund claim was initially rejected by the Assistant Commissioner and the rejection order was upheld. Subsequently the Tribunal vide order no. 447/2004-NB (A) dated 17/4/2004 held that the duty was not payable by the respondent. Thus, in view of the Tribunals final order dated 17/4/2004, the refund became admissible. At this stage, on being reminded by the appellant under their letter dated 21/6/2004, Assistant Commissioner sanctioned the refund amount on 18/08/2004. The point of dispute is as to whether for the purpose of interest liability under section 11BB, the date of filing of refund claim should be taken as 18/01/2001 or 21/6/2004 should be taken as the date filing of refund claim.

8. In our view, when the refund claim had been filed on 18/01/2001 and the same was ultimately paid to the respondent on 18/08/2004, notwithstanding the fact that the refund claim dated 18/01/2001 had earlier been rejected by the Assistant Commissioner and the refund was paid only when the issue was finally decided by the Tribunal on 17/05/2004, it is 18/01/01 which would have been to be taken as date of filing of refund and in terms of the Apex Courts judgment in the case of Ranbaxy Laboratories Limited (Supra) the interest liability would starred from the date of expiry of 3 months from the date of filing of refund claim. In view of this, we do not find any infirmity in the impugned order. Revenues appeal is dismissed.

(Rakesh Kumar) (S.K. Mohanty)

Member (Technical) Member (Judicial)

Ritu