SHREEWOOD PRODUCTS PVT. LTD. Vs. CCE
LAWS(CE)-2015-1-51
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on January 14,2015

Shreewood Products Pvt. Ltd. Appellant
VERSUS
CCE Respondents


Referred Judgements :-

CCE,HYDERABAD V. ITC LIMITED [REFERRED TO]


JUDGEMENT

Rakesh Kumar, Member (T) - (1.)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 173Q(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 35F. 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 35F, 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 11B 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. Commissioner's 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 appellant's 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 11BB 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.
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 35F of the Central Excise Act, 1944, that when on de novo adjudication by the Commissioner in pursuance of the Tribunal's 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 Tribunal's order dated 02.05.2008, that in this regard, he relies upon the Apex Court's judgment in the case of CCE, Hyderabad v. 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 Appellant's 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 appellant's 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.

(3.)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 11BB.
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