Commissioner Of Central Excise, Thane I vs Hindustan Coca Cola Beverages P. Ltd

(Arising out Order-in-Appeal No. VSK/3/TH-I/2010 dated 11.01.2010 passed by the Commissioner of Central Excise (Appeals), Mumbai I)

For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial)

1. Whether Press Reporters may be allowed to see No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy Yes of the Order?

4. Whether Order is to be circulated to the Departmental Yes authorities?

Commissioner of Central Excise, Thane I Appellant

Vs.

Hindustan Coca Cola Beverages P. Ltd. Respondent

Appearance:

Shri H.M. Dikshit, AC (AR) for the appellant Shri J.H. Motwani, Advocate & Ms. Nehal Parekh, Advocate for the respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial)

Date of hearing : 31.03.2015 Date of decision : 31.03.2015

O R D E R No:..

This appeal is filed by the revenue against the Order-in-Appeal No. VSK/3/TH-I/2010 dated 11.01.2010.

2. The facts that arise out of this appeal are that the respondent have filed refund claim on 09.12.2002, 20.01.2003 and 08.08.2003. The said refund claims were rejected and it was taken up in appeal before the Tribunal and vide the Tribunal order dated 06.06.2003 allowed the appeal of the appellant and directed the revenue to grant refund to the appellant. The refund has been paid but interest claim was not paid fully as was claimed by the assessee. The first appellate authority in these proceedings has held that the interest liability arises after three months from the date of filing of the refund claim by the assessee and accordingly set aside the impugned order to that extent.

3. Ld. Departmental Representative would take me through the Order-in-Original and grounds of appeal. He would submit that as per the provisions of Section 11B of the Central Excise Act, 1944 the refund claim is complete only when all the documents are filed and the said documents were finally filed on 30.08.2004. Hence interest paid by the revenue after 3 months from 30.08.2004 is correct order and the first appellate authority has erred in holding that interest is payable after 3 months from the date of filing of refund claims. It is also submitted that assessee had not established before the Adjudicating Authority that the duty incidence was not passed on by them and in any case, correspondence was entered with the assessee w.e.f. 13.11.2003 to 30.08.2004 directing the appellant to submit documentary evidence.

4. Ld. counsel appearing on behalf of the respondent drew my attention to the order of the first appellate authority. He would also submit that the order of the Tribunal dated 06.06.2003 specifically held in favour of the respondent and barring an amount which is prior to 21.02.2002 the entire refund claim has been allowed. It is his submission that by 30.01.2004 they have informed the department that all the documents were submitted while claiming the refund. Nothing new requires to be filed with them. He would also draw my attention to the decision of the Tribunal in Hindustan Sanitaryware & Industries Ltd. 2004 (168) ELT 243 and Duraline India P. Ltd. 2009 (237) ELT 689 for this proposition.

5. I have considered the submissions of both sides and perused the records.

6. Only issue that needs to be decided in this case whether the respondent is eligible for interest on the refund claim which was sanctioned belatedly. The first appellate authority has held that the interest that needs to be paid by the department to the respondent is from the date after three months of the filing of the refund claim. To come to a conclusion, he has recorded the following findings:-

13. I find merit in the argument of the appellant that there is no legal sanctity in taking 30.08.2004 as the relevant date, for all the relevant information was filed with the original refund claim as reflected in the correspondence between the appellant and the department. I am therefore of the view, that 3 months time period should be reckoned from the dates of the original refund claim (9.12.2002, 20.1.03 and 8.8.03) The appellants have also made the point that interest should be calculated from the date on which the payment was made. This contention is not supported by the legal provisions. There is no provisions in the law for granting suo motto refund. Any claim for amounts due from the government would have to follow the route of filing a refund claim under Section 11B so that the claim can be scrutinized for satisfying the unjust enrichment test. The payment of interest would therefore have to be solely guided by the provisions of Section 11BB of the Central Excise Act. I therefore hold that the interest was payable from the date of the original refund claim and therefore order of the original Adjudicating Authority is accordingly modified.

7. I find that the finding recorded by the first appellate authority are correct, as on perusal of the documents produced by the respondent before me, along with the letter dated 13.01.2004 and annexure thereof, I find that there is no change in the amount of the refund claim originally filed and as per the order of the Tribunal (order dated 06.06.2003). It is also seen from the correspondence which are annexed and produced before me, that there is no dispute that the refund claim which was filed by the respondent originally was never returned back to them. The entire finding as correctly brought out by the first appellate authority, is regarding the documents which are required to be given to department for purpose of verifying the refund claim. In my considered view, the first appellate authority is correct in coming to a conclusion that the interest amount needs to be paid to the respondent after three months from the date of filing of original refund claim; my view are fortified by the decision of the Tribunal in Hindustan Sanitaryware & Industries Ltd. (supra). I reproduce para 4

4.The above Regulations make it clear that the refund claim is required to be scrutinised by the proper officer and if the same is found to be incomplete, it would be returned to the appellant for re-submission. It will be the date of re-submission of the application which will be considered as date of filing of the application for the purposes of interest in terms of the provisions of Section 27A. Admittedly, in the present case, the appellants filed the refund claim on 5-1-2000. However, if the Revenue was of the view that the said application is incomplete in certain respect, they should have returned the same to the appellants as per the provisions of Customs Refund Application (Form) Regulation mentioned (supra). Admittedly, the application was never returned to the appellants as such, the date on which the same was filed on 5-1-2000 has to be taken as a date of application and the provisions of Rule 27A would start apply after a period of expiry of three months from the date of receipt of the application for which case the appellants would be entitled to the interest after the expiry of the said period.

8. I also find that in the case of Duraline India P. Ltd. (supra) (wherein I was a Member), on similar set of facts a view was taken, which is reproduced:-

6.?I have heard both sides and perused the records. It is undisputed that the refund claims as filed by the appellant if the first instance in the month of November 2001 were within time. The letter of the office of the Dy. Commissioner of Central Excise, Division Panji Goa dt. 26-2-2002 merely returned the refund claim filed by the appellants. In order to appreciate the correct situation, contents of the letter is reproduced, which are as under :-

Please refer to your letter No. DIPL/COMM, dated 28-11-2001 and this office letter dated 12-12-2001.

No documentary evidence has been submitted by you in this office till date. Since the claim is incomplete without documentary evidence and without any proper grounds of the claim, the papers submitted by you are returned herewith as they are not covered under the provisions of Section 11B of Central Excise Act, 1944.

It can be seen from the above reproduced portion of letter that the refund claims have been only returned to the appellant. The appellants have undoubtedly taken time for re-submitting the refund claim. The said refund claims were perused and verified by the adjudicating authority and has came to the conclusion that the appellants are eligible for refund of Rs. 4,65,239/- both on the ground that there is no question of time limit nor there is unjust enrichment. To my mind the findings, as reproduced in paragraph-2 in respect of the refund claim of Rs. 6,45,239/- rejection is only on the ground that the appellant has taken too long a period to re-submit the claims. I find that the said order is not correct and untenable on the face of the order of the Honble High Court of Delhi in the case of Arya Exports and Industries (supra). Their Lordships in that case held as under :-

The above approach of the Appellate Tribunal is in consonance with the settled principles of law and we see no reason to interfere, even if for the sake of argument it is assumed that we should have condoned the delay in filing the present appeal. The assessee had admittedly submitted the application within the prescribed time and if it surfers from any procedural irregularity the Department was under an obligation to require the assessee to submit the requisite documents. Refund is the right of the assessee and should not be taken away by the State especially with the approach of the kind that was adopted in the present case. The appeal is dismissed on merits.

I find that the issue in current case is squarely covered by the decision of Honble High Court of Delhi. Identical issue has been decided by the Honble High Court of Gujarat. I am of the considered view that the impugned order is unsustainable. Accordingly, I set aside the impugned order and hold that the appellant is eligible for the refund of the amount of duty of Rs. 6,45,239/- as ordered by the adjudicating authority. Appeal allowed with consequential relief, if any.

9. In view of the peculiar facts and circumstances of the case, and judicial pronouncement, I find the impugned order is correct and legal and does not suffer from any infirmity. The appeal filed by the revenue is devoid of merits and is rejected.

(Pronounced in Court)

(M.V. Ravindran) Member (Judicial)

//SR

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