Commr. of Cus. and C. Ex., Hyderabad-III vs Ampro Industries Pvt. Ltd.

Goda Raghuram, J.—This appeal by the Revenue u/s 30(G) of the Central Excise Act, 1944 is directed against the Final Order dated 14-5-2009 of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench, Bangalore [2010 (251) E.L.T. 259 (Tri.-Bang.)] rejecting the appeal of the Revenue preferred against the Order-in-Appeal No. 6/2006 (H-III), C.E., dated 14-2-2006 of the Commissioner of Customs and Central Excise (Appeals), Hyderabad. The respondent is a manufacturer of biscuits on job work basis for M/s. Ampro Products Ltd. During the period in question, the valuation of the goods was done on provisional assessment basis. The said provisional assessment was finalized by the authorities vide the adjudication order dated 14-8-1996. Consequent thereto, refund claims were filed by the respondent within six months of the assessment. In the initial round of litigation, refund claims were rejected on the ground that the assessee has not crossed the hurdle of unjust enrichment. On appeal from 2010 (251) E.L.T. 259 (Tri.-Bang.). On the assessee''s appeal, the Tribunal vide its Final Order dated 21-6-2005 held that the assessments were provisional and hence refund, which arises as a result of finalization, cannot be considered as time barred and clause of unjust enrichment will not be attracted; directed the authorities to fund the excess duty paid by the assessee.

Consequent to the order of the Tribunal dated 21-6-2005, refund claim was sanctioned and was given to the assessee. As no interest was granted on the refund amount, the assessee filed an appeal and the Commissioner (Appeals) concluded that the interest liability accrued and by the order dated 14-2-2006 ordered payment of interest. There against, the Revenue preferred an appeal before the CESTAT.

By the order impugned, the learned CESTAT held that since indisputably the respondent filed refund claims well within six months of the finalization of the provisional assessment by the adjudicating authority (i.e., 14-8-1996) and were filing refund claims regularly and as soon as the quantification was done by the authorities, the Revenue is required to pay interest after expiry of three months from the date of filing of the refund claim. This decision is recorded by the CESTAT on the basis of the decision of its Larger Bench i 2004 (93) ECC 615

Shri A. Rajashekar Reddy, learned Standing Counsel for Customs and Central Excise asserts that in Union of India (UOI) and Another Vs. Shreeji Colour Chem Industries, the Supreme Court upheld the claim of interest from the period commencing from a period of three months after an application was made by the assessee subsequent to an order dated 25-11-2003 of the CEGAT and therefore, notwithstanding the provisions of Section 11BB which ordain that if any duty ordered to be refunded under sub-section (2) of Section 11B to any applicant is not refunded within three months from the date of receipt of an application under sub-section (1) of Section 11B, interest is payable only from the date of application for refund submitted by the assessee after the order of the CESTAT dated 21-6-2005 and not from the date of his initial application submitted after final adjudication dated 14-8-1996.

In our considered view, on a careful consideration of the judgment of the Supreme Court in Shreeji (supra) there is no principle enunciated that the liability to payment of interest must be computed from not the time an application is made u/s 11B(1) (referred to in Section 11BB of the Central Excise Act, 1944) but from the time an application is made subsequent to final adjudication by the Tribunal and only an application for refund made subsequent to the final adjudication by the Tribunal which must constitute the starting point for calculation of the three months period beyond which interest is liable to be paid. On the aforesaid premise, we discern no error of law let alone a substantial error warranting consideration of this appeal u/s 35G of the Central Excise Act, 1944. The appeal is accordingly rejected at the stage of admission, after hearing the learned Standing Counsel for Customs and Central Excise Shri A. Rajashekar Reddy.