M/S.Shreewood Products Pvt. Ltd vs Cce, Gurgaon (Haryana)

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI

Date of Hearing:18.12.2014

Date of Decision: 14.01.2015

Excise Appeal No.247/2010-EX(DB)

[Arising out of Order-in-Appeal No.329/MA/GGN/2009 dated 6.11.2009 passed by the Commissioner of Central Excise (Appeals), Gurgaon, Haryana].

M/s.Shreewood Products Pvt. Ltd. Appellant

Vs.

CCE, Gurgaon (Haryana) Respondent

For approval and signature:

Honble Shri Rakesh Kumar, Member (Technical)

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

1 Whether Press Reporters may be allowed to see 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 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 Departmental authorities?

Appearance: Rep. by Shri Rajesh Rawal, Advocate for the appellant.

Rep. by Shri R. Khanna, DR for the respondent.

Coram:

Honble Shri Rakesh Kumar, Member (Technical)

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

Final Order No.50039/2015 dated 14.01.2015

Per Rakesh Kumar

The facts leading to filing of this appeal are, in brief , as under:-

1.1. The appellant are manufactures of block board, panel door, baton door and plywood, chargeable to central excise duty under Heading No.44.08 and 4410 of the Central Excise Tariff. During the period of dispute, the block board, flush door, and plywood were dutiable, while Panel doors and baton doors were fully exempt from duty. The allegation against the Appellant was that during the period of dispute they cleared the dutiable goods  flush doors and block board in the guise of the exempted goods viz. panel doors and baton doors. The Commissioner vide order-in-original No.4/98 d. 14.01.1998 confirmed the duty demand of Rs.88,72,686/- and imposed penalty of Rs.98,72,686/-. However, on appeal being filed to the Tribunal, the Tribunal vide final order no.392/2005-EX dated 20.04.2005 remanded the matter to the Commissioner for de-novo adjudication after supplying non relied upon documents and hearing the appellants. In do novo proceedings, the Commissioner vide order-in-original dated 11.11.2005 confirmed the duty demands of Rs.88,72,686/- and Rs. 3.5 lakhs against the appellant and imposed penalty of Rs.98,72,686/- on the appellant company under Rule 173 Q (1) of the Central Excise Rules, 1944. Besides this, penalty of Rs.1,00,000/- each was imposed on Shri T.K. Dhawan and D.N. Gupta of the appellant company under Rule 209A of the Central Excise Rules, 1944. On appeal being filed to the Tribunal against this order of the Commissioner, the Tribunal vide stay order dated 16.06.2006 ordered for pre-deposit of 50% of the duty demand for compliance with the provisions of Section 35 F. Though initially, the appellant company did not deposit this amount as a result of which, their appeal was dismissed for non-compliance with the provisions of Section 35 F, subsequently on 1.9.2006 they paid an amount of Rs.1,92,95,372/- (Rs. 88,72,686/- + Rs. 3,50,000/- + Rs. 98,72,686/- + Rs. 2,00,000/-) towards their entire duty liability and penalty. An application for restoration were filed and the appeals were restored.

1.2. The Tribunal vide order dated 2.5.2008 remanded the matter to the Commissioner with certain directions. In de novo proceedings, the Commissioner vide order-in-original dated 17.10.2008 confirmed the demand of only Rs.11,89,303/- against the Appellant company with penalty of same amount and imposed penalty of Rs.2 Lakh each on Shri T.K. Diwan and Shri D.N. Gupta, the Directors. The duty demand for the remaining amount was dropped. The appellant company, thereafter, filed an application for refund under Section 11 B of the Central Excise Act, 1944 on 21.10.2008. The Asstt. Commissioner vide order-in-original dated 13.01.2009 appropriated an amount of Rs.27,78,606/- representing the duty demand of Rs.11,89,303/- confirmed by the Commissioner in de novo proceedings with penalty of equal amount and penalty of Rs.2 Lakh each on Shri D.N. Gupta and Shri T.K. Diwan, Directors and ordered refund of penalty of Rs.76,44,080/-. The refund of Rs.88,72,686/- was refused to the appellant and was ordered to be credited to the Consumer Welfare Fund on the ground that the same is hit by the bar of unjust enrichment.

The appellant filed an appeal before the Commissioner (Appeals) against the Asstt. Commissioners order dated 13.01.2009 and the Commissioner (Appeals) vide order-in-appeal dated 17.03.2009, while upholding the appropriation of Rs.27,72,066/- towards arrears of revenue, ordered refund of duty of Rs.88,72,686/- holding that the same is not hit by bar of unjust enrichment. The Commissioner (Appeals) in addition ordering refund of duty of Rs. 88,72,686/- also ordered interest on this amount at the rate applicable under the law. It appears that since in pursuance of the Commissioner (Appeals)s order dated 17.03.2009, the duty refund of Rs.88,72,686/- along with interest was not paid to the appellant, the appellants counsel wrote a letter dated 30.03.2009 to the Asstt. Commissioner for refund of this amount with interest, as the Commissioner (Appeals) in his order dated 17.03.2009 had ordered refund of Rs.88,72,686/- along with interest giving a finding that this refund is not hit by bar of unjust enrichment. Treating this letter of the Appellant as refund application, the jurisdictional Asstt.

Commissioner vide order dated 17.04.2009 ordered refund of Rs.88,72,686/-, but refund of interest on this amount under Section 11BB was refund on the ground that this refund has been made within period of 3 months from the date of filing of refund application dated 30.03.2009 and as such, this is not a case of delayed refund and the provisions of Section 11 BB are not attracted. In other words, the Asstt. Commissioner treated the date of filing of the refund as 30.03.2009 instead of 21.10.2008. On appeal being filed to the Commissioner (Appeals) the Commissioner (Appeals) vide order-in-appeal dated 6.1.2009 rejected the appeal against which this appeal has been filed.

2. Heard both the sides.

3. Shri Rajesh Rawal, Advocate, ld. Counsel for the appellant, pleaded that the dispute in this appeal is only about interest payable to the appellant for delay in refund of duty of Rs.88,72,686/-, that this amount is part of the amount of Rs.1,92,95,372/- paid on 1.9.2006 as pre-deposit for compliance with the provisions of Section 35 F of the Central Excise Act, 1944, that when on de novo adjudication by the Commissioner in pursuance of the Tribunals Final Order dated 2.5.2008, the amount of Rs.88,72,686/- became refundable, interest on the same would be payable @ 12% P.A. for the period starting from the date of expiry of three months from the date of the Tribunals order dated 02.05.2008, that in this regard, he relies upon the Apex Courts judgment in the case of CCE, Hyderabad Vs. I.T. C. Ltd. reported in 2005 (179) ET 15 (SC), that in any case, when the Commissioner (Appeals) vide order-in-appeal dated 17.03.2009 had ordered refund of the duty of Rs.88,72,686/- along with interest and when no appeal has been filed against this order by the Department, the same has to be implemented, that the Appellants reminder letter dated 30.03.2009 cannot be treated as their fresh refund application., that interest is to be paid to the appellant in terms of the Commissioner (Appeals)s order dated 17.03.2009 and the appellants letter dated 30.03.2009 reminding the department for refund of the amount of Rs.88,72,686/- along with interest cannot be treated as fresh refund application and that in view of this, the impugned order refusing the interest is not correct.

4. Shri Ranjan Khanna, ld. Departmental Representative defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that there is no delay in refund of the duty amount to the appellant and, hence, there is no interest liability under Section 11 BB.

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

6. The appellant on 01.09.2006 had paid an amount of Rs.1,92,95,372/- towards their duty liability and penalty under TR-6 challan. When in pursuance of the Tribunals Final Order dated 2.5.2008, the matter was adjudicated de novo by the Commissioner vide order-in-original dated 17.10.2008, the appellant companys duty liability was determined as Rs.11,89,303/- with equal amount of penalty under Rule 173 Q (1). The appellant filed a refund application under Section 11 B of the Central Excise Act, 1944 on 21.10.2008 before the Asstt. Commissioner and the Asstt. Commissioner vide order-in-original dated 13.01.2009, after appropriating the duty demand of Rs.11,89,303/- and penalty of same amount and also the penalty of Rs.2 Lakh each on Shri T.K. Diwan and Shri D.N. Gupta , held that balance amount is refundable. However, out of the balance amount, he ordered refund of only Rs.76,44,080/-, which represented refund of penalty, to the appellant company and in respect of the refund of duty of Rs.88,72,686/-, he ordered its credit to the Consumer Welfare Fund, on the ground that the same is hit by the bar of unjust enrichment.

However, on appeal being filed to the Commissioner (Appeals), the Commissioner (Appeals) vide order-in-appeal dated 17.03.2009 held that the duty refund of Rs.88,72,686/- is not hit by bar of unjust enrichment and ordered its refund along with interest payable under the law. No appeal has been filed by the Department against the Commissioner (Appeals) order dated 17.03.2009. In our view, the letter dated 30.03.2009 of the appellant company addressed to the Asstt. Commissioner reminding them for the refund of this amount along with interest in pursuance of the Commissioner (Appeals)s order dated 17.03.2009, cannot be treated as fresh refund application and, therefore, the Asstt. Commissioners order refusing the interest and order of the Commissioner (Appeals) dated 6.11.2009 upholding the Asstt. Commissioners Order are totally wrong and not sustainable. Once the issue of refund and interest on the same for the period of delay was finally decided by the Commissioner (Appeals) vide order dated 17.03.2009 and that order was not challenged by the department, the issue of refund and interest on the same for the period of delay cannot be re-adjudicated and in this regard, the Asstt.

Commissioners order as well as Commissioner (Appeals) treating the appellants reminder letter dated 30.03.2009 as refund application and on this basis, refusing the interest on the ground that the refund of Rs.88,72,686/- was paid within three months, is totally wrong. We are of the view that since refund application had been filed on 21.10.2008, the interest on the amount of Rs.88,72,686/- would be payable for the period of delay starting from the date immediately after the date on which the period of 3 months expired. The judgment of the Apex Court in case of CCE, Hyderabad vs. ITC Limited reported in 2005 (175) ELT 15 (SC) is not applicable to this as, as in this case, the refund claim after de-novo adjudication in pursuance of the Tribunals order dated 02.05.2008 had been filed under Section 11B and therefore, the interest for the period of delay can be considered only under Section 11BB. The impugned order, therefore, is set aside and the Department is directed to pay interest on refund to the appellant company under Section 11 BB of the Central Excise Act from the date, immediately after expiry of three months from the date of filing of refund claim  21.10.2008.

(Rakesh Kumar)

Member (Technical)

(S.K. Mohanty)

Member (Judicial)

Ckp.

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